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INANCIAL TIMES 


Japan: Survival in 
land of the 
rising yen, Page 20 


UK warns 
farmers 
of threats 
to market 


No. 30,386 


Business Summary 


Wood 

Gundy quits 

Eurotunnel 

project 


EUROPE'S BUSINESS NEWSPAPER 

Thursday November 12 1987 


D 8523 A 


Gorbachev sacks leading advocate of rapid Soviet reforms 


Farmers within and outside the 
European Community must 
learn to live with £ree-market 
discipline or else risk a col 


♦ 


WOOD GUNDY, Canadian 
investment house- which took 
heavy losses on its part in under- 
writing the BP share issue, has 
of political support for maintain' pulled oat of underwriting the 
ing their livelihoods, UK Foreign S770rr\ ($I.3bn) share offer about 
— ” J to be launched by Eurotunnel, 

the Anglo-French group building 
Channel TunneL 


MR BORIS YELTSIN, one of the 
most outspoken advocates of 
rapid reforms in the Soviet 
Union, was sacked yesterday as 
head of the Moscow Communist 
Party for "serious shortcomings”. 

His removal comes exactly 
three weeks after a meeting of 
the Central Committee of the 
Party at which he made an out- 
spoken attack on senior Polit- 
buro members .over the slow 
pace of the economic reform 


num- 
and to 
Mr Gor- 


agalnst Mr Yegor Ligachev, 
ber two In the Politburo, a 
some extent against 
bachev himself. 

Mr Yeltsin, a non-voting mem- 
ber of the Politburo and a long 
time protege of the Soviet leader, 
may lose his Politburo post when 


BY CATHE3UNE MCSBJi WiEY IN MOSCOW 


Mr^eltsin, 66 , quickly estab- 
lished a reputation as a tough 
administrator determined to 
revamp Moscow city services nd- 


terse television statement that a 
new Moscow Party Chief had 
been appointed. 

Mr Lev Zaikov, the new 
Moscow part chief, is a full mem- 
of the ruling Politburo and 


tral Committee. 

His sacking will be seen as a 
blow to Mr Gorbachev, who had 
' promoted Mr Yeltsin from his 

. the Soviet leader. previous position as party Chief 

H i* criticisms were felt to have in the industrial city of Sver- 
been particularly directed dlovsk in an attempt to revitalise 


the matter is considered by the died with corruption and mem- o«- -- ~ “LrC the fOctober 21 meeting} a politi 

So^et party's 800-member Gen- unto 


at a meeting of the Moscow 
Party attended by both Mr Gor- 
bachev and Mr Ligachev. 

Announcing the change Soviet 
television said: "The City party 
(Communist party) plenum 
approved of the decision of the 
Central Committee Plenum 
which found Yeltsin’s speech at 

- - -,ti- 


initiated by Mr 
Soviet 


his pr 
Grishin. 

The announcement of his oust- 
ing, which had been the subject 
of speculation since Soviet party 
officials confirmed the internal 
dispute 12 days ago, came in a 


him 

from the post of the first Secre- 
Party Com- 


tege of the Soviet lender Mr Yelt- 
sin had been passed over for pro- 
motion several, times and 
western diplomats assumed Mr 
Gorbachev had failed to rally 
enough .support - for his promo- 
tion. 

Rumours of a battle inside the 
leadership over the pace and 
extent of reform have spread 
quickly through Moscow in 
recent weeks, and in a rare 
breach of the secrecy that nor- 


his “predecessor Mr Victor Gorbachev and Mr Ligachev. Mr 

Zaikov is also a strong supporter — - . , _ 

of Mr Gorbachev’s reforms and tar Y ^ the , „ , - , ... M 

another of the proteges moved mittee because of serious mis- . mally surrounds party delibera- 
into key positions by the Soviet takes in his leadership of the tions, Mr Anatoly Lukyanov, Sec- 
leader. 

The appointment was decided 


Moscow 
Although 


retary of the Central Committee 
n to be a pro- confirmed the dispute. 


mg i 

Secretary Sir Geoffrey Howe said launched by Eurotunnel, 

in Bonn. 

Growing farm surpluses, soar- the Channel 


ing costs and large-scale dump- 
ing “bid fair to destroy the world 
agricultural market,* he said. 
Page 2 

Call for FAO reforms 

Britain delivered an outspoken 
call for reforms of the adminis- 
tration of the the UN's Food and 
Agriculture Organisation in 
Rome. Page 2 

Reagan tries again 

President Ronald Reagan 
announced he would nominate 
federal appeals court judge 
Anthony Kennedy to fill a 
vacancy on the US Supreme - 
Court - the President's third 
attempt to' fill the seat left 
vacant on Justice Lewis Powell’s 
retirement in June. Page S 

Japan warns US 

Japan warned the US to remove 
$l65m of tariffs still imposed on 
its electronic goods or face a Gatt 
dispute panel. Japan to zeflSst 
Gatt call. Page 6 

27 killed in Sri Lanka 

At least 27 people were killed in 
guerrilla violence in Sri Lanka 
and Agriculture Minister Gamani 
Jayasuriya said he was resigning 
in protest against a plan to cre- 
ate a unified autonomous region 
for Tamils. Page 4 

Beirut airport bomb 

A bomb exploded at Beirut inter- 
national airport, killing at least 
five people and wounding more 
than 50. • 

Bangladesh arresta 

Police detained both of Bangla- 
desh.'* opposition lenders 

and 50 pnftntozs were injured 
during a protest- agai n st police 
shootings on Tuesday at anti- 
jvernment demonstrations. 
4 

Iranians attack tanker 

Iranian revolutionary guards 
launched rocket-propelled gre- 
nades from two gunboats and 
slightly damaged a Japanese- 
owned tanker - flying the Pana- 
manian flag - which was follow- 
ing an American convoy in the 
southern Gulf. 

US shuns Ortega plan 


kiht hto STEEL Corporation 
is to be privatised before 
Britain's next general election, 
the Government said, after the. 
sharp imp r ov e ment in the corpo- 
ration's profits and financial 
position. Page 9 

COPPER closed at 51,470 
.616) on the London Metals 
still £62.50 ahead of 


Copper 

Cash Ugh grade (C per tame) 
1600 


1400 



Jan 


British Airways wins 
clearance to renew 
takeover bid for BCal 


BY MICHAEL DONNE AND CLAV HARRIS H LONDON 


Tuesday's close. The three 
month price ended 528.50 up at 
£1,203.50 a tonne. Commodi- 
ties, Page 32 

WAT J. STREET: The Dow Jones 
industrial average closed up 
21.06 at 1899J20. Page 44 

LONDON: Cheered by President 
Reagan's remark that the dollar 
had risen enough, equi tiesposted 
a strong rally. The FT-SE 100 
index closed up 65.8 ’.to 1,639.3, 
while the FT Ordinary index fin- 
ished 43.1 higher atl, 290.0. 
Details Page 40 

TOKYO: After a firm openi 
equities plunged but-dosed 
their lows after-late intervention 
by big securities houses. The 
Ittkkel average dosed down, 
649.70 at 1,03576- JP>«ge44 

SOUTHLAND Corporation 
large Dallas-based owner of the 
7-Eleven chain of convenience 
stores, has again failed to raise 
$4bn in bank, and junk bond 
finance needed to complete a 
controversial leveraged buyout 
by the founding Thompson fam- 
ily. Page 21 

OLYMPIA ft YORK, privately 
held real estate and resources 
group controlled by Toronto's 
Reidamann brothers, has boasted 
its stake in Campeau, Canadia n 
property developer, to about 8 
per cent of outstanding subardi- 


BRITISH Airways was cleared ' 
yesterday to proceed with a new 
takeover offer for British Caledo- 
nian Airways, under revised 
terms approved by the Monopo- 
lies ana Mergers Commission. 
Lord King, BA chairman, said 
the bid would definitely go 
ahead. 

The commission's report pub- 
lished yesterday concluded that 
a takeover under revised propos- 
als submitted by BA, in an effort 
to reduce the anti-competitive 
nature of the proposed link, 
would not operate against the 
public interest. The original bid 
would have been unacceptable, 
the commission said. 

The proposals, which were not 
revealed to other parties for com- 
ment' during the commission's- 
three-month inquiry, are likely 
to change the entire routes, pat-,, 
tern of UK domestic and interna- 
tional air transport, opening the 
way for other UK airlines to 
with the combined BA- 


BA would be allowed 1 to 
all of B Cal's intercontineni 
routes but would give up 
licences on five domestic and 
three European routes, pemfing 
re-application for aQ.of them. It 
h J also give up a minimum 
of" 6,000 runway “slots* at 
Gatwick, fewer than 10 per cent 
of the combined group's total for 
scheduled and charter -flights. 

Lord Young, Secreta ry Of State 
for Trade and Industry, was 
obliged to allow the bid to pro- 
after it received the com- 
mission's' backing. Although BA 
is not legally boun d to ful fil the 
conditions it put forward. Lord 
Young said he would refer the 
matter bade to the commission if 
there was any suggestion that 

BA was reneging on the terms. 
Lend King stressed BA's deter 


PROPOSED ROUTE 
LICENCE CHANGES 

• BCal's licences between 
Gatwick and Faria, Brus- 
sels and Nice to be surren- 
dered. 

• BCal's licences will be 
surrendered for routes 
which it does not at pres- 
ent operate between 
Gatwick and Athens, 
Copenhagen, Hamburg, 
.Oslo, Rome, Stockholm 
and Stuttgart. 

• BCal's UK and Channel 
Island licences to be sur- 
rendered. 

• BA/BCal will reserve 
the right to reapply for all 
the above routes on equal 
t«™ with other airlines. 

• BA wiU withdraw BCal's 
pending appeals against 
the granting of licences to 
Air Europe for routes 
between Gatwick and 
Amsterdam, Brussels, 
Copenhagen, Frankfort,. 
Geneva, Munich, Paris and ’ 
Zurich. 

• BA wfll not oppose bids 
by other airlines on long- 
hand routes where “dual" 
or ^multiple designation" 
applies, including - all ! 
Western European routes 
except Italy and possibly 
Fortngsl; all routes, to the . 
US and Canada?' wad’ all 
routes to the DAE, Qatar 
and Ba h ra in . 

• BA will submit to a 
review by the Civil Avia- 
tion Authority of all BCal 
routes, to see whether fur- 
ther British competition 
on them is desirable. 


was less well 


The US dismissed a proposal by' voting shores Page 2L 

Nicaraguan President Daniel . ... . . ' . . 

Ortega W talks with President AMERICAN Telephone and 
- - ••• ”*» •"*' — ; — *•— announced a 


The 
reed 

< dent UK airlines. Mr 

imitation to proceed. “We look man, chairman or International 
forward to a speedy merger of Leisure Group, owner or Air 
BA and BCal which is in the best Europe, claimed that BA s utter- 
interests of shareholders, staff, pretatiori of the conditions was 
the travelling public and the at odds with that of the Dep art- 
country,’ he declared. ment and Trade and Industry. 


He was especially critical of 
BA's, intention to continue to 
operate under temporary 
licences several European routes 
: which it had agreed to give up as 
part of the deal BA's agreement 
to withdraw BCal's objection to 
Air Europe's licences on eight 
routes was meaningless if there, 
were Insufficient runway slots 
and air traffic capacity to oper- 
ate them, Mr Goodman said- 

BA's new offer must be made 
within 21 days. Lord King said: 
“The only thing that matters is 
the price, “ but would not be 
drawn, on the amount. “We will 
.endeavour to- come up with an 
offer that is acceptable to BCal,” 
he added. 

Sir ' Adam Thomson, -BCal 
chairman, was more cautious. “If 
they come up with the same 
offer as before, then the deal is 
on," he said. “If they do not, well, 
we shall have to wait and see.” 

He stressed that BCal was still 
talking to other potential part- 
ners and could still form an asso- 
ciation' elsewhere if the new 
offer failed.: It is generally 
accepted, however, that in the 
wake of the. market crash, the 
new offer, wfll be worth consider- 
ably; less, than the 5237m 
gt422m) originally offered by 

The commission's decision to. 
approve the merger has been 
endorsed by rife CfvH Aviation 
Authority, which wifi-have the 
task of overseeing its smooth 
implementation 

AH scheduled flights of the 
combined group would operate 
under the British Airways name, 
while British Caledonian would 
be the charter carrier, taking in 
British Airtours, the BA subsid- 

yesterday announced 
pre-tax profit of 5232m for the 
six months to September 30, 


Details, Page 10; Parliament, 
Page 12: Editorial Comment, 
Page 1»; Lee. Page 20; BA 
results. Page 20; Market 
Report, Page 44. 


US budget 
talks may 
be near 
to accord 

By Stew art Flaming, US Ecffior, 
in Washington 

CONGRESSIONAL and White 
House budget negotiators were 
ptimistic yesterday about the 
prospects of reaching a deficit 
reduction accord this week. 

The participants, including Mr 
James Baker, the US Treasury 
Secretary, and senior Democrats 
and Republicans in Congress, sat 
down to what was expected to be 
igthy 13th day of talks. 

Mr Robert Michel, the RepubH- 
minority leader, said as he 
went, into the meeting: “We are 
not terribly far apart.' 

Senator Bennett Johnston, a 
Democrat from Louisiana, 
believed the negotiators could 
reach the “broad outlines* of an 
agreement during the day but 
that It would be difficult to 
resolve details. 

A major sticking point remains 
tlie role of taxes in the final 
package. Democrats have pro- 
posed raising $ 12 bn of taxes but 
conservative Republicans, who, 
with President Ronald Reagan's 
support have been resisting tax 
increases, are insisting that such 
a rise represents too teg a pto% 
portion of the package. 

On Tuesday Democrats . pro- 
posed a S33.7bn deficit reduction 
package for 1988, rising to 
S54£bn in 1988. However, some 
of the components are not 
regarded by many budget 
jerts as measures which 
luce the deficit on along-terna 
basis. 

Once the final package is 
agreed; and some agreement is 
looking increasingly likely, ana- 
lysts said it will focus not only 
on the size of the deficit reduc- 
tions and how real the projected 
savings are, but also the likeli- 
hood that Congress will Imple- 
ment them. \ 

Separate reports yesterday 
quoted Federal Reserve Board 
officials as saying that the Board 
was unlikely to take further 
steps to lower interest rates or 
reduce its discount rate below 6 
percent. 

A deficit reduction . 
necessary to reassure the 
dal markets about Washington's 
determination 

London shares surg e Page 


Ronald Reagan at which US- 
backed Contra rebels .would be 
present. 

Romania cuts energy 

Romania ordered 30 per cent 


Telegraph has 

sharp . acceleration of its 
sion plans for its ,J_J 
tal long-dist 


tions network, aimed at nearly 
doubling the network- Page 21 


DOLLAR was firm in quiet 



South Africans clashed 
with Soviet bloc troops 


Schoolgirls shot 

Two Palestinian schoolgirls were 
shot and wounded in the Israeli- 
occupied Gaza strip by an Israeli 
whose car was being stoned by 
schoolgirls protesting against the 
killing of another girl on Tues- 
day. Page 4 


h V: 


DM1.6660 
(FFr5.652 
(SFrl.3650); 

Page 33 

STERLING lost 
$1.7785-1.7795; 


FFr6.6860 
SFrl.3750 
136.25 (Y134J50). 


'DM2. 9726): ' 
FFrI0.095fr); 


point 

DM2.9825 
FFr10.1126 
fr); SFr2.4450 
SFr2-4S75); Y 240.50 (Y240-25}. 

33 

FIAT, Turin-based car maker 
Authorities in the Soviet Central and conglomerate, ^ 

Asian republic of Tadzhikistan regroup several ofj «8 «ffthmov- 
set a prison term of up to eight ing equipment ^ 

sle who Infected machinery subsidiaries in a new 
holding company to be called 
Fiatgeotecte 


Alps penalty 


years for people 
others with AIDS. 


Paper-thin batteries 

A new battery far domestic 
appliances which is as thin and 
flexible as paper was unveiled by 
two Japanese compa nies . 


Insurance group, 
rear-end 


Colonial ties 

Zimbabwe's House of Assembly 
Speaker told parliamentarians to 
dress ‘as well, if not better than 
the colonialists' when attending 
parliament - after a minister was 
ordered out of the debating 
chamber for not wearing a tie. 


AON, US 
expects 

results but is Increasing some 
health insurance rates to stem 
third-quarter losses in group 
medical and Medicare supple- 
ment insurance. 

mitfH T Wt VwiUwMtlftini. 

. Liechtenstein-based fam ily cor- 
poration, has had judgment 
reserved by a Canadia n court on 
a CSL2m (US*900,0 005 lawsuit it 
brought on Dome 
nfvV-jnfT repayment of 24 unse- 
cured Swiss franc 6 per cent 
notes. 


BY ANTHONY ROBINSON 81 JOHANNESBURG 


SOUTH AFRICAN forces clashed 
directly with Soviet and Cuban 
forces on the ground and in the 
air earlier this month in 
southern Angola, General Jannie 
Geldenhuys, chief of the South 
African • Defence Force 
announced yesterday. 

The dash, described as a lim- 
ited action*, appears to have 
been the: first direct conflict 
between South African and 
Soviet bloc forces since Opera- 
tion PTOtea mounted by South 
Africa towards the end of 1981 
j in su p port of rebel Unita forces 
I in Aiignlw . 

The decision by both sides to 
I intervene on behalf of their 
respective allies reflects their 
assessment of the high stakes 
involved.'. Military officers in 
SopjEh Africa believe that if the 
current dry season offensive 
'Unite by the Angolan 
»yenunent backed by the 
!, Cubans, fails, the Soviet Union 
| would switch instead to a diplo- 
matic effort to secure a negoti- 



forces and the formation of a 
coalition government which 
would include Dr Jonas Savimbi, 
the Unita leader. Such a sugges- 
tion has so far been rejected by 
the Angolan Government of 
President Eduardo dos Santos. 

- According to General Gelden- 
huys, “Russians and Cubans 
using tanks, sophisticated 
ground-to-air missiles and fighter 
aircraft, indmfing MIG 23s and 


_ _ attack helicopters, entered the 

ated settlement to the civil war . battle after Angolan Gpvemmcmt 
that has been raring since 1977. forces were badly beaten by 
This, Pretoria hopes, would Unita and suffered serious set- 
focus on the withdrawal of temks.' Jjist month, llnite 
Cuban and other Soviet bloc cl a i med that four army brigades 


totalling 18^00 men backed up 
by armour and air cover, and 
controlled by a Soviet gent 
Konstantin Shagnovitcn, had 
been forced to retreat along the 
. line of the Lomba river, 26 miles 
■ north of the strategic Unita air- 
strip and base at Mayings in 
southern Angola's Cuando-Cu 
bango province. 

Angola counter-claimed that 
South African aircraft and troops 
had taken part in the battle and 
that Angola had shot down sev- 
eral South African Mirage air- 
craft, claims denied by South 
Africa. 

Angolan Government forces 
suffered a similar defeat in Sep- 
tember 1986, but were able to 
withdraw to their base camp at 
Cuito Cu ana vale after hea 
losses. This time Soviet an 
Cuban forces appear to have 
been called in to prevent a rout 
According to the South African 
version, this prompted South 
African intervention. 

General Geldenhuys linked the 
intervention of South African 
and South West African Territo- 
rial Force units to the long run- 
ning war against Swapo guerrfl- 
* tundred miles to the 


Europe-— — - 
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AgggNTENE 
MtJRDEE 
OPENS A 


The Dps end downs of share 
advertising — 14 

UK 
'truths 


18 


Bf Ufwrtat comment: End of an aviation 
era; Concessions from Syria IB 


T^wwiite viewpoint: Beware the 
of false dawn 


PANDORA'S Joe ttogaly: What is a terrorist? 


19 


WocUlMfex. 


■S4 


BOX 


PH ^dut ttanl Atfomrtir will have 
to stadf im pl ications of 

astitertithlfrtbMtatefVBflsS 


Lex: British Airways and BCat 
copper prices 


Companies Price may derail Santa Fe 
sale — — 21 


Technology: Pumping Efe into Japanese 
man ufa c turing — 31 



Iraqi President Hussein (left) with his foreign minister 

Tariq Axis at yesterday’s Huai session 

Arab leaders 
condemn Iran 


BY TONY WALKER IN AMMAN 

ARAB LEADERS yesterday 
unanimously condemned Iran s 
continuing refusal to agree to an 
immediate ceasefire . in the Gulf 
War and expressed support for 
Iraq. ' 

In a surprisingly tough com- 
munique at the end of an emer- 
gency four-day summit in 
Amman, Arab heads of state cen- 
sured Iran for occupying Iraqi 
territory and its “procrastina- 
tion' over a United Nations ceas- 
efire calL 

The Amman summit also 
opened the way for Arab states 
to resume relations with Egypt, 
broken off in 1979 .after Cairo 
signed the peace treaty with 
Israel. As a result of the talks, 
several Arab states - including 
most Gulf countries - are expec- 
ted to resume full diplomatic 
relations with Egypt shortly. The 
United Arab Emirates was the 
first to announce it would do bo. 

Representatives of the 21 Arab 
states participating in the sura- 
mmit. convened by King Hussein 
of Jordan were specific in their 
condemnation of Iran, tiling its 
“provocations and aggressions" 
in the Gulf region. 

The final communique read 
out by General Chadli Klibi, 
Arab League Secretary, 


expressed strong support 
Saudi Arabia ana Kuwait In 


for 
in the 

face of Iranian threats. The sum- 
mit also supported an interna- 
tional Middle East peace confer- 
ence, “with the partidpation.-'of 
all -patties concerned,' Inch 
the Palestine Liberation 
sation, on an equal footing. - 
The latter provision- 
important to the PLO became it 
answers one of its principal .con- 
cerns - that it might be sqqected. 
out of a primary role jn jfeade 


Arab summit will inevita- 
bly be- seen in terms of winners 
and losers. Syria appears to have 
suffered a reverse over its inabil- 
ity to prevent most Arab states 
from resuming relations, with 
Egypt. The firm tone of the-reso- 
iution condemning Iran may also 
be seen as a setback for Syria, 
one of the few Arab states to 
maintain cordial relations with 
Tehran. 

But President Hafez al-Assad 
of Syria is certain to have 
exacted a price for his endorse- 
ment of tne strongly worded 
final resolution. Reports have 
been circulating in Amman that 
the Syrian leader received 

Continued on Page 20 


Profit from experience 



'■4 





2 


Financial Times Thursday November 12 1987 


EUROPEAN NEWS 

Hilary Barnes explains why Denmark’s attitude to agricultural reform is so cautious 

farmers 


DANISH fanners' organisations 
do not accept the EC Commis- 
sion's price reform proposals for 
the Common Agricultural Policy. 
They feel the issue is interna- 
tional rather than European and 
that problems of trade In agricul- 
tural products can only be satis- 
factorily solved in cooperation 
with other major agricultural 
exporting nations. 

This is not Just a refusal by the 
organi sa tions to be seen to be 
negotiating reductions in income 
for their members, or a reflection 
of the fact that Mr H. Kjeldsen, 
the Danish farmers' leader, is 
also president of Copa, the Euro- 
pean farmers' organisation, and 
must be seen to be taking a 
tough line on behalf of European 
farmers. 

The stance also reflects an 
important aspect of the Danish 
situation. Agriculture accounts 
for 22 per cent of merchandise 
exports and exports to third 
(non-EC) countries play a much 
larger role than they do for most 
other member countries. 

Some 63 per cent of Danish 
agricultural products, by value, 
are exported, and 37 per cent of 
the exports are sent to third 
countries. The US is the biggest 
single market for canned meat; 
exports of pigmeat to Japan are 
now as valuable as exports at 
bacon to Britain; Iran is second 
to Germany as a market for 
cheese (in tonnage It is the big- 



gest market); third world coun- 
tries buy tne bulk of Danish 
powdered milk products. 

Danish dairy exports, which 
accounted last year for about a 
quarter of agricultural exports, 
have contributed only on rare 
occasions to the EC butter moun- 
tain, as the industry b able to 


export everything it can produce 

and more. 

The reductions in milk produc- 
tion following the imposition of 
CAP restrictions means that the 
dairies are short of milk and are 
now talking of importing either 
raw milk or milk powder from 
other EC countries to enable 
them to meet the export demand 
for cheese In particular. 

This, of course, might be help- 
ful to Denmark's chronic deficit 
on the current balance of pay- 
ments but would not help the EC 
budget, as third country export* 
are also subsidised through the 
CAP system of export restitution 
payments, which make up the 
difference between the European 
price and the world market 
price. 

The days have gone when 
Danish export interests were 
more or less identical with those 
of the formers and their power- 
ful organisations, grouped under 
an umbrella, organisation called 
the Agricultural CaundL All the 
main farm organisations are 


members of the council, which 
carries considerable clout not 
only because of Its broad base 
but also because it has a highly 

competent staff. 

But as a political pressure 
group, farmers are not the power 
they once were. Fenners consti- 
tute only about 4.3 per cent of 
the population and the Liberal 
party, through which they have 
traditionally channelled their 
influence, in recent years has 
won only about 12 per cent of 
the vote. 

The Liberals participate in the 
four-party, nan -Socialist minor- 
ity coalition, and since the pres- 
ent coalition came into office in 
1982 the Minister of Agriculture 
has been a Liberal, but not 
always a farmer. The current 
minister, Mr Laurids Toemaes, 
who was appointed after the 
election to the Folketing (parlia- 
ment) in September this year. 


the squabble over GAP prices 
and the EG budget is only one of 
several threats to their liveli- 
hood, and not necessarily the- 
roost crucial one. 

Pig and dairy fanners have 
been subjected to rigorous envi- 
ronmental restrictions calling for 
substantial investments by the 
farmers to reduce pollution from 
the 9 -3m pigs (the human popu- 
lation is o.lm) and 2.4m cattle 
and from the use of artidflal fer- 
tiliser (which they must reduce 
from 400,00 tonnes a year in 
1984-86 to 250,000 tonnes by 
1990). 

The fanners’ latest concent is 
that a Foiketing mare concerned 
for animal welfare than a com- 
petitive agriculture will enforce 
restricti o ns on the pig producers 
- such as banning the tethering 
of sows to prevent piglets from 
being squashed, or minimum 
space requirements for bacon 


Tire spindling costs of the common agricultural pol- 
icy threaten to undermine the European Communi- 
ty’s attempts to provide a sounder basis for its 
future financing, the central issue at the heads of 
government summit in Copenhagen on December 4-5. 
In the fourth of a series of articles from mHomI 
capitals, we look at the political, economic and 
social factors Influencing individual governments on 
the farm issue 


was previously the ehairmnrt of 
the main fisheries organisation. 

The farmers themselves feel 
they are for from having their 
rightful share of Influence on 
public and political opinion. 
They fed they are being pflkxled 
on the issues of pollution and 
the maltreatment of animals. 

As for as they are cun cer n ed. 


mgs - which would prevent them 
from competing on equal terms 
with producers In other coun- 
tries. 

The squeals being emitted by 
the l e a d ers of the pig p roducers' 

^^{^ed’restricJn^wem an 
early stage of discussion. Bid 
there are precedent* which sug- 


gest that their concern Is not 
without foundation. Minimum 
space requirements for battery 
hens, Imposed last year, were out 
of line with regulations in the 
rest of Europ& The result is that 
Denmark, for the first time, is 
now a substantial importer of 
eg& and Danish egg producers 
are being severely squeezed. 

The Government's position on 
CAP reform does not follow the 
farmers' rejectionist line. One 
good reason is that Denmark 
Holds the presidency and Prime 
Minister Paul Schlueter would 
naturally like to' be able to pre- 
side over a successful summit In 
Copenhagen in early December. 

Agricultural exports, account- 
ing for 22 per cent of total mer- 
chandise exports (including 
canned meat, powdered milk ana 
mink pelts, but excluding sugar 
and malt), are of crucial Impor- 
tance to the Danish economy. It 
is therefore at vital interest that 
the GAP should not break down 
and that its basic principles 
should be retained. 

From this it follows that the 
need for budget discipline is 
accepted 

From Denmark's paint of view, 
the introduction of national quo- 
tas or the di88ohitian of the CAP 
under the pressure of the intro- 
duction or national subsidies 
must be avoided at all costs. 

In the Ministry of Agriculture 
in Copenhagen the mood is not 
one of despair. "We axe reason- 
ably optimistic that the minis- 
ters of agriculture will agree on 
pr o pos a ls which we can hand on 
to the Council,” said Mr Soeren 
Soerensen, one of the ministry's 
senior negotiators. 

Previous articles in tUi series 

appeared on October 29, 
November 4,6 


Britain keeps up 
the pressure 
for reform at FAO 

■nr nauwvi rrn m nnur 


BT JOHN WYLESM ROME 

AN OUTSPOKEN call for 
organisational reforms at 
the UN’s Food and Agricul- 
ture Organisation was deliv- 
ered hen yesterday by Mr 
Chili Patten, Britain’s Min- 
ister for Ovei seas Devdsy 

In a speech to the FAO’s 
biennial general confer- 
ence, he. vignetted that the 
donor countries will con- 
tinue their battle for 
changes in the UN agency 
despite their fail are on 
Monday to unseat the direc- 
tor-general, Mr Edoaard 
Saouma. 

Britain, the US, Canada 
and other donors Memo Mr 
Saonma’s If years at the 
helm for many of FAO’a 
p r esent shortcomings. How- 
ever, now that the Lebanese 
director-general has 
secured a third six-year 
term, they are having to re- 
think their strategy. 

Their mein posh is behind 
a proposal boa the Nordic 
countries, to be voted on 
next w eek , for a high level 
independent study at the 
FAO’s str uc tu re, together 
with a jso fee e innsl me na g e - 
■mat review. Among other 
the donors feel that 
staff in Some 
,600 on the 
in developing coun- 
tries implies false priorities 
and top-heavy adminiatra- 


muv review. . 

♦Hag ., the dor 
a 7406-strong i 
and jnat 2,< 


Arguing that "radical 
rethinking is now 
right across the 


which "cannot be stopped at 
the Baths of Cararalla* (the 
Location of the FAOVhead- 
quarters In Some), Mr Pat- 
ten said that the conference 
of 158 member countries 
should approve proposals 
“which will take the FAO to 
reconstructi o n and n more 
positive and central sole in 
the 21st century.” 

Britain, he said, hoped 
that the proposed indepen- 
dent study "wiE lead to n 
ranch stronger country 

focus, and a dearer identth 

cation of priorities in the 
budget ' and the programme 
of work." 

Management and man- 
power structures and proce- 
dures should be overhauled, 
he added. 

He was strongly eAtical of 
Mr Saonma’s budget propos- 
als for 1968-89. While the 
director-general regards 
them as austere In the 
extreme, Mr Fatten said 
that the case for an 
increase from 9427m 
(1986-87 budget ) to 9610m 
“is far from convincing." 

Stressing the need to 
rekindle the FAO dream, Mr 
Patten said the agency 
needed to be respected for 
the advice and support it 
gave its me mb ers. It needed 
to set an example “by its 
Impact on the ground, by 
the leanness and strength 
of Its — * . and by 
the enthusiasm of its co-op- 
eratfcm with others." 


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10022. 


Prague denial angers Norway 


BY KARB! POSSUM OSLO 

NORWAY SAYS that the dental 
by Czech osfovak officials of 
involvement in an "eavesdrop- 
ping operation' recently discov- 
ered in the Norwegian embassy 
in Prague represents s further 
deterioration in relations 
between the two countries tines 
the discovery was mad* 

Norwegian authorities hare 
revealed a large bugging opera- 
tion In which between 10 and 20 
microphones were discovered in 
its embassy Czechoslsvakta. 

During the concluding 
of the renovation of the eml 
bulldlxig a Norwegian 
surveillance team discovered- 
several microphones located in 


various "Important roams" of the 
premises which "were connected 
to cables leading outside the 
building," said Mr Per Paust, the 
Norwegian Foreign Ministry 
spokesman. 

He said that the operation was 
very advanced but that the Nor- 
wegian authorities believed that 
it could not hare been in opera- 
tion for too fanft although they 
could not be sure when it was 
established. 

On Tuesday the Gsechoslmvak 
ambassador In Oslo was sum- 
moned to the No r weg ia n Foreign 
Ministry where strong protests 
were delivered by Norwegian 
officials about the bugging oper- 
ation. 


Oslo officials my bug- 

ging operation represents aseri- 
ous breach of rales at the Vienna 
Convention on diplomatic rela- 
tions and that it hampered the 
building of stronger East-West 
relations. 

They also say, however, that 
Norway is not intending at this 
time to break off diplomatic rela- 
tions with Csechoslaralda but 
that in the next few days they 
wlfl assess their next move in 
the matter. "The relations snd 
dialogue betwee n Norway and 
Csec h os tav akta hare been made 
complicated by this discovery 
and further by the dental.* said 
Mr Paust. 


France loses textiles aid battle 


BY illiW DAMONS M 


TOUGH EC r e strict io ns on state 
aid to the twtflit industry y eater - 
day received legal support from 
the European Court cl Justice in 
Luxembourg. It turned down an 
appeal by the French Govern- 
ment against a ban on textiles 
aid imposed by the European 
Commission, its Judgment stren- 
thens the Brussels authorities' 
hand in their three-ye a r-old cam- 
paign against state assistance 
likely to distort fair competition 
in textiles. 

The decision also comes as a 
relief for the Commission, which 
only three weeks ago lost an 
attempt in the European Court 
to ban a West German regional 


aid scheme on the g ro un ds that 
its case was badly prepared. 
Ironically, Brussels was sup- 
ported in yesterday* case fay the 
west German state government, 
which, unlike the country's 
regional authorities, is a staunch 
opponent of industrial aid. 

Brussels originally vetoed 
national textiles aids schemes in 
Britain, France and Belgium taro 


years ago for giving their benefi- 
ciaries an unfair advantage over 
unsubsidtaed competitors and 
having inadequate social Justifi- 
cation. 

The French scheme was by for 
the largest, re p re s en ting annual 
loan subsidies of FFrlBOm 


to FFr200m (£20m> 
around half of all textile aid 
awarded by EC governments. 
Paris was the only Government 
to appeal, arguing that the Com- 
mission had not given it a proper 
hearing and that its scheme was 
intended to help badly needed 
technology investment rather 
than to subsidise production. 

The Court, however, accepted 
the Commission’s contention 
that the French Government had 
already been allowed to disburse 
a disproportionately targe share 
of state aid for the sector and 
that the textiles industry had 
recovered enough to get on with- 
out public help. 


Howe 
warns EC 
on farm 
policy risk 

By ttvfd KM b! ft”* 

FARMERS most learn to five with 

free-mari^disciplineQrdseririta 

collapse of political support m&in- 
*wininp tfwir livelihoods. Sir Geof- 
frey Hcnre, tlK British Foreign Sec- 
retary, said last night 
hi a hard-hitting speech setting 
down the need for market duripfine 
to solve the EC’s ag ric ultural crisis, 
Sr Geoffrey said rising farm sur- 
pluses, soaring costs and targe- 
scale dumping could destroy the 
worid agricultural market 
Sir Geoffrey's speech, before the 
German Foreign Policy Society in 
Bonn, represented a clear challenge 
for the West German Go v ernme n t, 
which is strong l y resisting toe idea 
of farm price e nta to bring 
the Community’s ag ricultura l pro- 
duction bari c info balance . 

His remarks were intended to lay 
down a marker for the crucial Com- 
munity summit next month in Co* 
penhagen, at which EC leaders will 
again he wrestling to cut baric tin 
excess European form p ro duction 
at the heart of the Community's fi- 
nancial problems. 

Before the speech, Sr Geoffrey 

anil *m> fimtwwiwHy hud {o Strain 

every muscle” to reach agree m e n t 
at Copenhagen but gave only a cau- 
tious assessment of whether he 
thought it could be achieved. He 
was careful to point out that price 
cuts needed to be applied with other 
policies such as quotas and auto- 
matic output "stabilisers" to limit 
costs and cut back production. 

Mr Hans-Dietrich Genscher, the 
West German Foreign Minister, 
whom Sir Geoffrey saw earlier in 
the day, agreed that the EC’s farm 
crisis "should be solved," Sir Geof- 
frey said. 

Mr Genscher, like the rest cf the 
Bonn Government, Is known to be 
adopting an uncompromising line 
on resisting farther price cuts for 
German cereal formers, who are al- 
ready **«w"plaiwtwg H H w f y rfh r 
suffering big imposed juice reduc- 
tions in the past four years. 

But Sir Geoffrey said, that it was 
a "natural German intimation” to 
want to dznch accord at Copenha- 
gre before Bonn took over the oner- 
ous *■* CnwumiwH y nrfrtarf. 

ency in tim first six months of 1968. . 
Intamaw w it h UR A gri c ul t u re 

Minister, Page U 


-I'-- % 



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l-inuncml Times Thursday November 12 1987 


EUROPEAN NEWS 


1 


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>y 


Budget puts Goria coalition in jeopardy 


BY JOHN WYLE3 M ROME 

ITALIAN POLITICS last night 
returned to familiar terrain. - a 
weak coalition lacing ita down- 
fall after less than four months 
in office because one member 
(the Liberal Party) is threatening 
to walkout 

As an additional harassment 
for the young and Inexperienced 
Christian Democrat Prime Minis- 
ter, Ur Giovanni Goria, the three 
largest union confederations yes- 
terday called a four-hour genera] 
strike on November 25, the first 
since a two-hour protest in 1985. 

The spark -which has ignited 
union action and the threatened 
Liberal withdrawal is an injec- 
tion of rigour into the Govem- 


were 


ment’s 1988 

Unaware that the 

opening a trap door under him. 
Mr Goria outlined substantial 
changes in the budget on Tues- 
day evening aimed at reducing 
the budget deficit bum the ear- 

He insisted^" that £he risk of 
higher InflatLon'and recent mar- 
ket turbulence required the Gov- 
ernment' to shelve both tax 
reductions and rises in VAT 
rates. 

Having mate or less prepared 
its gvtt, the liberal leadership 
yesterday postponed a final deci- 
sion after Mr Goria called a 


meeting for tomorrow of the sec- 
retaries of the coalition parties. 
But Mr Renato Altissimo, the 
Liberal secretary, left Qttle room 
for manoeuvre by insisting on 
fundamental changes to the bud- 
get strategy to bring it into line 
with the policy agreements on 
which the coalition was farmed 
in July. 

Mr Goria. denied this was 
bound to mean another internal 
negotiation on the budget, which 
has been retouched almost as 

S times since it was pres- 
at the end of September as 
the restored ceiling of the Sistine 
Chapel. His Treasury Minister, 
the Socialist Mr Giuliano Amato, 


added that there could not be a 
budget for every day of the 


Mr Altissimo says that the 
decision to postpone income tax 
cuts for a year breaches under- 
takings given in the Govern- 
ment’s policy programme. He 
claims that the whole thrust of 
the budget is to increase pay- 
ments to the state in one form or 
another without any effective 
action against wasteful spending. 

If the Liberals do leave, the 
Government would still retain a 
majority, but veiy little of the 
authority with which to pilot its 
budget through Parliament. Mr 


G oria ’g resignation would there- 
fore seem likely, and the result- 
ing crisis could deny the countr- 
eeonomic direction for seven 
weeks and, more Immediately 

President Francesco Cooriga M 

state visit to London next week. 

With industry and agriadtoze 
toe budget 


also lined up against 

proposals for their alleged failure 
to improve competitiveness, and 
the unions complaining about 
the inadequacy of expenditure 
on job creation and development 
in toe Mezzogiorno, there Is 
clearly very tittle consensus 
upon which the Government can 
birild its position. 


Cut in British rebate from EC proposed 


BY QUENTIN 


IN 


DETAILED PROPOSALS for a 
of British compensation 
the EC budget, which could 
cut the UK budget rebate by up 
to Ecu 1 bn (£700n0 a year, were 
approved by the European Com- 
mission yesterday. 

The plans are likely to be the 
most politically explosive part of 
the EC financial reform package 
to be negotiated by beads of gov- 
ernment at their summit, in 
Copenhagen next month. 

Mr Henning Chriatophersen, 
the Budget Commissioner, 
insisted yesterday that the pro- 
posals, which would give Britain 
a repayment of contributions 
based entirely on the level of 
farm mending, would be ‘gromly 
equivalent* to the present sys- 
tem negotiated at the Fontaine- 
bleau summit fat 1984. 

However, British officials 
Insist that it is likehr to mean UK 
contributions will rise by around 1 
Ecuibn a year - and therefore be 


Thatcher, the 


Mrs Maf- 
Prime 


The plan also proposes that 
only seven of the other II mem- 
ber states will contribute to the 
compensation, and that of those 
West Germany ~ will pay a 
reduced share, putting by far the 
( burden of the cost on 
and Italy. That aspect Is 
also likely to prove a serious 
stumbling mock to agreement. 

Mr Christophersen said yester- 
day that the Commission had 
maintained Its proposals exactly 
as they were first put forward at 
the beginning ofthe.year, as part 
of a coherent package. Although 
the British compensation as such 
would be reduced, be said, Brit- - 
ish contributions to the Brussels 
budget would also be cut if the 
member states agreed on a new 
payments system tied to gross 
national product. 


Latest calculations suggest that 
id the current year, E6eUK"wiII 
receive a budget rebate - actually 
a reduction in next year’s pay- 
ments - of 60 me Ecn&2bn. That 
is two thirds of the gap between 
its share of EC spending, and its 
share in VAT payments, esti- 
mated at Ecu3.4on, the calcula- 
tion of corn: 
at 

The Commission Is proposing 
to repay 50 per cent of the differ- 
ence between the UK share in, 
EC gross national product and its 
share of payments from the 
Common Agricultural Policy. 
The low UK take from the form 
Is the key to its large net 
ion to Brussels. 

If the new- calculation were 
applied to 1S87, the British com- 
pensation would be only around 
Ecuibn, but there would also be 
a EcuSOOm reduction in initial 
contributions - still an Increase 


of some EcuSOOm in final net 
payments. 

Mr Christonhersen said that by 
1992, the reduction in UK contri- 
butions from the new GNP for- 
mula would be more like 
Ecul.lbn, and its compensation 
on farm payments some 
Ecul.2bn - whereas Fontaine- 
bleau would give a total compen- 
sation of between EoriLGbn and 
Ecu3bn. That he said would be 
.‘grossly equivalent.” 

Mrs Thatcher has maintained 
throughout that she will not 
accept any deal which is not at 
least as good as the Fontaine- 
bleau agreement. 

Other member states, led by 
West Germany and the Nether- 
lands, want to see the British 
compensation abolished, but 
they know that Mrs Thatcher 
can block any Increase in overall 
EC budget contributions until 
ahp is satisfied. 


Soviet paper attacks psychiatric abuse 


BY CATHERINE MCELMIMEY MMOSCOW 


A SOVIET newspaper has 
launched an outspoken attack on 
the sensitive issue of psychiatric 
abuse, which has often lied to the 
imprisoning of healthy people in 
mental asylums. The article 
appeared to be port of a contin- 
uing campaign to restore credi- 
bility in Soviet psychiatry which 
has often been attacked in the 
West for Us use in the suppres- 
sion of dissidents. 

Korasomolskaya Pravda, the 
Communist youth newspaper, 
devoted almost an entire page to 
an expose of psychiatric abuses. 
It described the case .of a 20- 
year-old worker in Leningrad 


who was diagnosed as schizo- 
phrenic and committed to a 
mental hospital after she openly 
criticized her boss -and factory 
working conditions. 

. It accused the doctors who 
committed her of “crude viola- 
tions’ far forcibly commi 
her even though she .was 
ously sound.” The article also 
accused Soviet psychiatrists of 
administering incapacitating 
drugs to patients, accepting 
bribes and being ignorant of 
modem methods. 

The attack on Soviet psychiat- 
ric practices Is an outgrowth of 
Mr Mikhail Gorbachevs call for 


a wide 

range of formerly taboo subjects. 

‘High, impenetrable fences 
have for long yean shielded psy- 
chiatric science and practice 
from glasnost" the newspaper 
said. And behind those fences 
is in progress.” 

owever, the attack also 
appeared to be a continuation of 
a Soviet effort to improve the 
tarnished w orldwide image of its 
psychiatry. Moscow left the 
world Psychiatric Association in 
1983 after allegations that it was. 
using psychiatry to silence politi- 
cal dissent. 

More than 20 dissidents have 


itting illegality 
obvl- Howe? 


been freed Cram mental 
this year under a 
gramme of releasing political 
prisoners. Among the prisoners 
released from prison camps was 
Dr Anatoly Koryagin, a psychia- 
trist jaflea in 1981 tor publishing 
an expose entitled ‘Unwilling 
Patients.” 

Dr Koryagin, whose case was 
championed by -Western psychia- 
l estimated in May that 183 
ile remained in mental instir 
tutions because of their political 
views. Dr Koryagin was allowed 
to emigrate with- his family to 
Switzerland last April but was 
stripped of Ms Soviet citizenship 


Brussels 
backs air 
merger 

By WHam Dawkins fa 

COMPETITION official ii in 
the European Community 
yesterday gave a tentative 
welcome to the conditions 
set by the UK Monopolies 
and Mergers Commission 
for a merger between Brit- 
ish Airways and British Cal- 


The report appeared to 
answer the E ur ope a n Com- 
mission's main concern, 
that the merger should not 
restrict smaller carriers' 
access to routes shared by 
the two airlines, officials 


BA's offer to surrender 
licences on rentes from 
Gutwick to Paris, Brussels 
and Nice is expected to 
deflect many of the Com- 
mission's worries. 

However, the Comndasloa 
wants to study the report In 
more detail before giving 
its formal view. 

Mr Peter Sutherland, the 
Competition Co wnris n io uer,. 
is expected to say whether 
or not Brussels wfll give ita 
blessing to the merger 
"shortly,'* said an official. 

The Commission does not 
have formal p o wers to vet 
big takeovers In advance, 
although it Is pressing to 
get member states to agree 
to a merger control poUey. 

An ofHrial said: “We have 
no prerogative to give the 
green tight, bat we can look 
at the likely impact on the 
common nuke: If there la 
sin impact, we. can than do 
something.” 



PEACE MARCH: Fren ch soldiers dressed in First World War uni- 
forms march past the Are de Trionstpbe In Paris during ceremonies 
yesterday commemorating the signing of the armistice ending the 
1914-18 


European semiconductor 
market faces nil growth 


BY TBRRY D008W0RTH 

EUROPE’S semiconductor mar- 
ket will show zero growth this 
year, and i s likely to expand at a 
much slower rate than the zest 
of the worid next year. 

These are among the main 
conclusions of the latest survey 
of the European semiconductor 
industry by Motorola, the US 
electronics group. The company 
expects European sales growth 
in local currency terms to 
expand to Jast over B per cent 
this year, wdl behind the 20 per 
cent it is predicting in the uS 
and the 16 per cent in Japan. 

The zero growth experienced 
in Europe in 1987 compares with 
much more optimistic forecasts 
at the beginning of the year 
when the market was expected 
to rise by around 10 per cent 
These projections have been 
undermined by a slump in West 
German semiconductor sales, 
mainly due to delays in telecom- 
munications equipment con- 
tracts and general inventory 
reductions by West German elec- 
tronic companies because of 
tougher conditions in their 
export markets. 


Italy has also suffered an 
unexpected decline in sales this 
year, although both the UK and 
France have generated increases 
of almost 10 per cent. All of 
these four main European mar- 
kets should grow in 1988, says 
Motorola, with UK shipments 
going up by 10.1 per cent in local 
currency terms, Italian deliveries 
by 10.3 per cent, French by 9.8 
per cent and West German by 7.3 
percent. 

According to Motorola, Euro- 
pean suppliers are winning back 
a little market share in their 
home market at the expense of 
US manufacturers. Sales by the 
indigenous companies are expec- 
ted to amount to 4&fl per cent of 
European shipments in 1987 
against 36 per cent three years 
because of the help 
have "had to built up their 
lines from govemment- 
jinanced development pro- 
grammes. The share of US com- 
panies in Europe this year is 
expected to amount to 45.4 per 
cent, while the Japanese compa- 
nies are forecast to slip to 10.5 
per cent from 112 per cent. 


product 

finance! 


Bonn urged 
to act oyer 
economic 
slowdown 

By David Marsh in Boon 

THE West German Econom- 
ics Minister, Mr Martin Ban- 
genuum, b an urged that Par- 
liament approve swiftly the 
planned 1990 tax cut pro- 
gramme to offset worries 
about a slowdown in the 
economy. 

In a letter to Mr Gerhard 
Stoltenberg, the Finance 
Minister, he also opposed ' 
attempts to ent government 
spending further to make 
up for falling tax revenues 
cansed by the IBtn gff l * T> econ- 
omy. 

He stopped short of rec- 
ommending t b " ear- 

lier introduction ofDUKHm 
(£6.7bn) of tax cats sched- 
uled for 1990. _ 

Although he regards it as 
a possibility in the event of 
a “cumulative downturn” In 
the economy, he does not 
think that point has yet 
been reached. Economies 
Ministry officials said 

According to the officials, 
Mr Range mann also pro- 
posed repeal of the stock 
exchange turnover tax 
which lms been much criti- 
cised by bankers as damp- 
enlng the competitiveness 
of West German stock 
exchanges. 

His letter also pleaded for 
more progress on deregulat- 
ing the economy and on pri- 
vatising state enterprises. 
On these points, the Gov- 
ernment's performance dur- 
ing its five years in office 
has lagged well behind the 
wishes of the Free Demo- 
cratic Party , the Junior 
partner in the Bonn coali- 
tion which controls the Eco- 
nomics Ministry. 

The letter is believed to 
have been inspired by Mr 
Otto Schlecht, the veteran 
state secretary at the Eco- 
nomies Ministry. Mr 
Schlecht, like many private 
sector economists, believes 
that part of the 1990 tax 
cuts could be brought for- 
ward to 1989 without rais- 
ing the West German public 
sector deficit to danger- 
onaly high levels. 

The Economics Ministry 
recognises, however, that 
the political task of 
steering the tax cuts 
through the Bnndesrat (the 
upper house of Parliament) 
would make the task of ear- 
lier enactment of the 1990 
tax package very difficult. 



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I. 



4 


Financial limes Thursday November 12 1987 


OVERSEAS NEWS 


Strong yen boosts 
Japan imports 21% 


BY IAN RODGER M TOKYO 

JAPAN'S IMPORTS continued to 
grow rapidly in October, bat the 
country still reported a trade sur- 
plus of SSJBbn on a customs cleared 


-Imports were up 2L4 per cent to 
Sl&8bn compared with October 
1888, and imports of manufactured 
goods, excluding gold and mineral 
fuels, rose even faster at 28 per 
cent, according to figures published 
by Japan's Ministry of Finance. 

The trend reflects toe impact of 
the higher yen and measures taken 
by the Japanese Government to 


open the country’s markets to im- 
ports. 

Exports were stronger than ex- 
pected, rising 7.7 per cent to 
mfibn. The result was a 13 per 
cent tfeding in toe trade balance 
from October 1888. 

' Japan's surplus with the US was 

S4Jbn, unchanged from a year ear- 
lier and toe second highest level 
this year. 

Exports to the EC rose 18.7 per 
cent to Y3Jhn, but imports from the 
EC, which have been rising strongly 
so far fhfa year, were down 18 per 
cent to YL5bn. 


Five killed in Beirut 
airport bomb explosion 

A BOMB hiditon in a suitcase went 
off inside Beirut’s crowded interna- 
tional airport yesterday, killing at 
least five people and wounding 
more than 50, police reported. Bea- 
ter reports from Beirut 

.' The police said that toe airport in 
Syrian-controlled Moslem West Bei- 
rut was te e in g with hundreds of 
travellers and their relatives when 
the bomb exploded. 

Among the wounded were child- 
ren who had come to see relatives 
leave from the airport, re-opened 


earlier this week after a five-day 
strike. 

Police said the suitcase with the 
bomb had apparently been planted 
by a woman at the entrance to the 
departure hall. 

It was the first attack this year at 
toe airport, Lebanon's main link 
with the outside world. 

Dazed Lebanese rushed to the 
airport to ask about their relatives. 

Police said most of the dead or 
wounded were airport employees or 
people who had come to see rela- 
tives off on flights. 


John Murray-Brown looks at cash economy problems in an Indonesian village 

Whale venture lands on the rocks 


DRIED WHALE meat even in hard 
times is not the most appetising 
prospett But Mr Mattoeus Bataona 
and other hunters hr toe tiny In- 
donesian village of Lemalera know 
little else. 

Using equipment which would 
have made Captain Ahab seem the 
master of high-tech, Lemalera’s 
rowing and sailing boats ply the An- 
tarctic currents once favoured by 
British and American 19th-century 
whaling fleets. 

Tie survival of this cheek-by-jowl 
enterprise, isolated on the volcanic 
i sland of Lemhata in the country’s 
eastern archipelago, might seem 
surprising at a time when whaling 
communities in countries such as 
Japan have retrenched under pres- 
sure from environmental groups 
and toe Save ton Whale campaign. 
Perhaps more surprising is that 
Lematera's traditional way of fife 
should have been endorsed by none 
other than the United Nations 
through its Rome-based Food and 
Agricultural Organisation (FAO). 

Under toe competitive slogan. 
Food for Hanger, FAO launched a 
£250,000 aid project in 1974, introdu- 
cing Lemalera to the technology of 
harpoon guns and in toe process 
bringing the first whiff of com- 
merce to a community previously 
used to simple barter. 

The project aimed to raise firing 
standards in. what is one of the 
poorest regions of Ind one sia,.where 
every year there is_a three-month 
seasonal shortfall of basic protein 


foods. The projects subsequent fai- 
lure had little or nothing to do with 
the mounting international criti- 
cism of aamncTCial whaling. But its 
abandonment after less than two 
years muterlineri, for the local au- 
thorities at least, the problems of 
bringing effective change to remote 
rural areas where incomes are de- 
clining populations decreasing and 
where little alternative employment 
exists. For the Government of Pres- 
ident Suharto which has laid great 
store by its record of development, 
such failure provided a salutary 
lesson. For the 3,000 inhabitants of 
Lemalera toe project’s demise still 
rankles today. 

"No-one understands our ways,” 
says Mr Bataona, a leading mem- 
ber in a society where family ties 
are considered all-important, lib 
deed one of toe commonest com- 
plaints levelled against the project 
was that it set out to break down 
this corpo r atist family-based family 
system, distributing the catch even- 
ly among all members of toe com- 
munity, so ignoring the well-tried 
practice whereby whale meat was 
carefully apportioned among- the 
successful crew members. . 

What proved more disruptive was 
toe sheer size of- the catch once 
hunters had been persuaded to take 
aim behind modem harpoon can- 
nons instead of throwing them- 
selves bodily from the prow, gaffe 
in hand like matadors before a bull 
> a m eth o d sometimes fa*w] for the 
hunter. 


During the first two seasons toe 
project caught 31 sperm whales. 
This compares with 44 caught by all 
toe traditional 15-man rowing boats 
together. T he result was a glut of 
meat and oils, half of which was left 
unsold after the first season. What 
is more, it was calculated that every 
whale caught by the project cost 
50,500, compared with a barter 
equivalent value of 5280 under the 
old system. 

Today Lemalera has tittle to 
show for the project The FAO 82, 
toe boat donated by toe project, 
was until recently used to ferrypeo- 
ple from Lemalera to the main is- 
land of Flores. It has now been 
moved to the fishery department in 
TCwpang, the provincial capital in 

West Timor, a farther slight to toe 


Probably of mare lasting 
was the short-fived experience of a 
cash economy, something new far 
people who hitherto bartered whale 
meat for vegetables grown by com- 
munities in other parts of the is- 
land.' Th«» village shop today offers 
a paltry' selection of household 

itemt at inflahni priww jy ft 

stant source of wonder as well as 
frustration far people who have 
little recourse to use the national 
currency. Lemalera’s isolation h** 
if anything deepened in toe 10 
yeara since the end of the project A 
hard-topped road, which helps ser- 
vice villages on toe north ride of toe 
island and was funded by the World 


Bank, stopped some five miles 
short of L emaler a. The ferry ser- 
vice meanwhile to Flores leaves 
just once a week. News paper s rare- 
ty make ft this far, and despite toe 
impressive advances in satellite 
technology in many parts of the 
country there is stffi no telecammur 
nications let alone television. 

Further dislocation in such com- 
munities seems inevitable as people 
are forced to look .for work else- 
where. Mr Bata on a, for example, 
takes casual weak m the state-run 
shipyards at Surabaya, earning 
there more in eight weeks than in a 
whole year at Lemalera. H he could 
fmH permanent e m pl oy ment, -he, 
says, he would move with Ids wife 
and six-year-old daughter tomor- 
row. His cousin, Mr Domy Bataona, 
was more fortunate. He now works 
In t hft - TTiriftqeipan embassy in To- 
kyo, the latest in an impressive line 
of public servants to emerge from 
Lemalera, a place which, though is- 
olated, is far from backward. 

"The whaling is just about over," 
says Mr Bachmans Bataona, an- 
other cousin. "Most people want to 
get an ed ucati on and a job." Origi- 
nally chosen by the FAO to help ad- 
minister the project, he now works 
in nearby Larantuka, the regional 
with the fisheries depart- 
ment. 

One story holds that toe first set- 
tiers in Lemalera 'were carried 
there on. the back of a whale. Today 
it will ***** more than a whale to 
persuade toe young people to stay. 


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.? i ( 

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S Africa 
denies it 
destabilises 
neighbours 

By Anthony RoUnaoa in 
Johannesburg 

-GEN MAGNUS MALAN, the 
-South African Minister of 
Defence, yesterday rejected 
accusations of deatah fl fa lng 
the front-line states and 
blasted the policies and 
. lenders of neighbouring 
governments for the eco- 
nomic, political and. mili- 
tary decline of the rerira. 

Gen. reputed to be 

.one of the most hawkish 
m e m l-nn of the Cabinet and 
a possible successor to Pres- 
ident P.W. Botha, used the 
visit to Cape Town by a 
right-wing American group 
to make a speech denying 
changes vmde most recently 
by tie London based Inter- 
national Institute . for Stra- 
tegic Studies. In its latest 
global military review, pub- 
lished this week, the Insti- 
tute blamed South African 
intransigence for increased 
military spending in sub- 
Sahelian Africa "com- 
pounded by South Africa’s 
active destabilisation poli- 
cies". 

In an " m « a « n y vitriolic 
attack on the leaders of 
neighbouring black states 
Gen M«i«" described Mr 
Robert Mugabe, the Prime 
Minister of Zimbabwe as a 
foolish hypocrite and 
accused him of genocidal 
policies against the Mate-: 
bele minority. "The civil 
Insurrection In Matebele- 
land is a direct remit of the 
Mugabe Govern m ent’s poll-.. 

interference. This has 
caused 'destabilisation 
which hna nothing to do 
with South Africa," he 
added. 

Gen Malan also a t tacked 
the “despotic- governments 
of Angola and MdsamMqne 
for gross **-"*■»- of human 

- rights. He accused Mozambi- 
que of btoDdlng "an African 
Berlin Wall" of landmines 
along its border with South 
Africa sad said Angola had 
been turned into "a wasted, 

. empty and brohen lsad lit- 

- tered with sophisticated 
'weapons smp®Med by the 
Soviet bloc”. 

He warned Zambia, Mo* 
ambique and k«k— that 
"the tone and content of 
their propaganda is totally 
unacceptable to ns” ana 
called on all the cou n t ri es 
• In the region to accept Oat 
"as the regional power we 
' have the .right tokelp for 
: nuilate the ground Yules for 
Intermctlon In the region". 


Mozambique 
rebels raid 
into Zambia 

: By VMorMaa * In Lusaka 

MOZAMBICAN rebels have 
carried out 'an attack across 
the border into Zambia, klll- 
lng at least one person and 
abd acting several others, 
according to the Zambian 
authorities. 

The raid, one of the most 
serious on Zambia’s eastern 
frontier, marks a further 
escalation of the security 
problems In southern Africa 
caused by the civil war In 
Mozambique. 

Dr Kenn et h the 

Zambian President, 
announced that troops had 


been sent to the border 
area to deal with the situa- 
tion. 

The guerrillas of Che Moz- 
ambique National ' Resis- 
tance had. destroyed an 
agricultural co-operative 
and stolen: about 100 head 
of cattle, said Dr Kaanda. 

Zambia supports the Mou- 
ambtaia government politi- 
cally but has not so Car fol- 
lowed Zimbabwe, Tanzania 
and Malawi in providing 
troops. MNR guerrillas have 
repeatedly made incursions 
into Zimbabwe, ih fling more 
than 20 civilians. 


Police hold 
opposition 
leaders in 
Dhaka 

POLICE detained both of Banda- 
desh's main opposition l eaders 
yesterday, and 60 protesters 
were injured during a protest 
against police shootings at ano- 
goverment demonstrations the 
previous day, Reuter report* 
from Dhaka. 

Police broke down a hotel 
room door to take Begum Khal- 
eda Zia, leader of the Bangladesh 
Nationalist Party, into what they 
called “safe custody". 

Scores of police also prevented 
Sheikh Houma, head of the big- 
gest opposition group, the 
A wand League, from leaving her 
home to address a press confer- 
ence. • 

The two women had called a 
general strike in Dhaka to pro- 
test against the killing of at least 
three people 1 in demonstrations 
on Tuesday aimed at forcing the 
resignation of President Hossai n 
Mohammad Ershad. 

The Government has banned 

S ublic meetings of more than 
ve people in the capital for the 
next week. 

Thousands of protesters fought 
running battles for the second 
consecutive day In central Dhaka 
with police who fired tear 
and charged with batons.. * 

detained 73 people bringing 

arrests since the opposition cam- 
paign was launched two week 
ago to an official 1,456. 

A handful of rioters set fire to 
a US Information Service cul- 
tural centre. The motive for their 
action , was not dear. The build- 
ing was gutted. 

* Police said Begum Khaleda 
would be internet! far a month 
In her home only 200 yards from 
President Ershaa’s house. 

After the dawn to dusk strike 
ended - truckloads of police 
descended on Sheikh Hasina's 
home and escorted her back 
inside when she attempted to 
leav e 

Minister quits 
as violence 
hits Sri Lanka 

A WAVE of student demonstra- 
tions and guerrilla violence 
rocked Sri Lanka yesterday . and 
a senior minister said he was 

a 

autono- 
Ren- 
ter reports froa Colombo. 

Police reported at least 27 
killed in rene w ed danhai across 
Lthe mImmI. and militant Sinha- 
lese ptudento-taaged anti-govem- 
ropnt demonstrations on four 
campuses, across country to 

I protest aga in at ffie' 'autonomy 

To add' to Ids woes. President 
Junius Jayawaidene was yester- 
"day haridedthe resignation of Mr 
Gamani Jayasuriya, the Agricul- 
ture Minister. The minister 
opposes plans' to -unify Sri Lan- 
ka s northern and eastern dis- 
tricts to create a self-administer- 
ing Tamil area. 

“I have resigned from my port- 
folios as well as from my seat In 
parliament. I'm opposed to the 
merger of the northern and east- 
era districts," he declared, with- 
out elaboration. 

He resigned a day before Mr 
Jayewardene’s United National 
Party is expected to push legisla- 
tion through parliament provid- 
ing^ limited sen-rule far the Tam- 
ils ih an effort to end -four years 
of ethnic bloodshed. 

The measure is opposed by 
hardline members of the major- 
ity Sinhalese community. 

John Elliott adds from New 
Delhi: The Indian- Government 
yesterday turned down a 
demand from opposition parties 
in the New Delhi Parliament for 
Indian troops to declare an 
immediate ceasefire in their bat- 
tle against Tamil Tiger extrem- 
ists in Sri Lanka. ' 

Mr Natwar Singh, Minister of 
State for ExternafAffairs, said at 
the end of a six hour two-day 
debate that Indian troops could 
not be asked to impose a cease- 
fire until there was a clear 
.. from' the Tigers that 
abide by toe mdo-Sri 
. .. - oe accord and surren- 

der all their arms. 


Palestinian girls hurt 
in Gaza shooting 


BY ANDREW WHITLEY IN JERUSALEM 


TWO PALESTINIAN schoolgirls 
Were shot and wounded yester- 
day in the Israeli-occupied Gaza 
Strip, a day altera Jewish settler 
had kxQed another girl outside a 
nearby refugee camp. 

Several settlers were arrested 
fay Israeli police after Tuesday's 
incident. A protest demonstra- 
tion yesterday by some 30 
Schoolgirls, outside a high school 
in the heart of Gaza City, turned 
to tragedy when an Israeli whose 
?ar was being stoned got out of 
the vehicle mid began firing at 
his tormentors. 

The Palestinian Press - Service 
in Jerusalem said that a 14-year 
old girl, Sylvia Mahdi, was shot 
in the spinal cord, and flown to 
hospital in Tel Aviv in a 'serious 


c ondit ion. Another, 14, 
received a bullet- wound in her 
leg. . 

The presence in Gaza of the 
army-protected settlers, who 
occupy »me 30 per cent of the 
disputed region's best land, has 
long been a burning issue- for the 
locaI ^^“tlnian population, 
many of whom ark refugees from 
farad. But in the latest incident 
first reports suggest that an 
employee of the \XvH Adminis- 
tration, the military government 
m Gaza, may have been respon- 
sible. ■ 

-- lwBI * on for 
said by one 
of the girls to have been in um- 
lonn. 


Kim Young Sam popularity rises 

recently, Mr Kira scores best on 
nts commitment to democratic 
politics and on 'freedom of the 
press, a top issue. Second is his 
opposition rival Mr Kim Dae 
Jung, who scores best with 
human. rights and abflity-to set- 
tle labour disputes. 

Mr Boh Tae Woo, candidate far 
the ruling party- fa favoured by 
voters looking for economic 
development. 


THE popularity of Mr Kim 
Young Sam, the South Korean 
presidential- candidate, has risen 
sharply in the wake of hist party 
nominating -convention earlier 
this week when he announced 
the support of a respected mili- 
tary man for hia party, Maggie 
Ford reports from SeouL 
According, to one of the first 
''b on the candidates since a 
on polling was lifted 


POlfa 

ban 


5 


Financial Times Thursday November 12 1987 


AMERICAN NEWS 


Reagan names moderate 
to Supreme Court post 


BY NANCY DUNNE IN WASHINGTON 


PRESIDENT REAGAN yesterday 
nominated Judge Anthony Ken- 
nedy of Sacramento, California, 
to the Supreme Court. It was the 
President's- third try for his 
fourth appointment to the court. 
Judge. Kennedy. Is regarded as. a 
moderate conservative, known 
for his wit and knowledge. 

In the bicentennial year of the 
US Constitution - which has 
been the focus of the nomination 
battle * the President has found a 
candidate who reveres the docu- 
ment. 

While serving as an appeals 
court- judge in California during 
the past. 12 years. Judge Ken- 
nedy has retained a part-time 
post teaching constitutional law 
at the University of Pacific’s 
McGeorge School of Law. 

There, on at least one occasion, 
the 51-year-old jurist has donned 
powdered wig and a long coat to 
dress as President James Madi- 
son, the Father' of the Constitu- 
tion*. His lectures, are said to 
bring standing ovations from his 
students. 

He has in his years on the 
bench demonstrated no desire to 
rewrite the constitution to serve 
any ideological interests. For this 
reason, the most vociferous 
opposition to his selection has 
been generated by the Republi- 
can right wing, which views the 
current vacancy on the court as 
the President’s last opportunity 
to safeguard his social agenda for 



Antho ny 

law and order Jadge 

years to come. 

The judge’s record, for the 
most part, would, gladden the 
heart of most conservatives. It 
was he who overturned the first 
statewide 'comparable worth" 
case when a lower court ruled 
that the Kate of Washington did 
not have to give equal pay to 
women for different jobs of 
equal worth. . . 

Neither law nor logic deems 
the free market a suspect enter- 
prise,” the judge wrote in his 
decision. The state was not 


SEC chief proposes 
tighter insider laws 

BY ANATOLE KALET8KY M NEW YORK 


A MAJOR tightening and clarifi- 
cation. of US laws on Insider 
trading was proposed yesterday 
by Mr David Rooer, chairman of 
the Securities ana Exchange 
Commission. 

Mr Ruder said the SEC would 
support legislation, to ensure that 
the definition of insider trading 
"Is broad enough to reach not 
only corporate employees, but 
also persons associated with the 
market, friends and relatives and 
other persons who knowingly 
violate a relationship of trust 
and confidence by utilising 
inside Information for their own 
benefit". 

Mr Ruder also -proposed that a 
new insider trading law should 
provide an expbcil right for pri- 
vate investors and companies to 
sue insider traders far damages 
equal to^-any jiroGttf-they ntade 
or losses they avoided through 
the wrongful Iiv of iwfwsiitihn . 

Mr Rader's proposals, made in 
a speech prepared for delivery to 
a New York investor group, 
reflect growing concern in Wash- 
ington about the difficulties 
faced in convicting insider trad- 
ers and bringing private actions 
for damages under the law as it 
stands. 

Among the reasons, for this 
concern is an appeal before the 
Supreme Court against the con- 
viction for insider trading - of Mr 
Foster Winans, a Wall Street 
reporter who leaked information 
about share tips in his forthcom- 


ing columns. If, as is widely 
expected, Mr Winans wins his 
appeal against the SEC’s charges, 
a crucial legal precedent will 
have been set. making it more 
difficult to prosecute other 
alleged insider traders who do 
not have a .direct contractual 
relationship of trust, with the 
companies whose shares they 
buy andselll 

‘ Another legal problem worry- 
ing some lawmakers is the diffi- 
culty which private litigants are 
experiencing in lawsuits agai 
Mr Ivan Boesky, the Wall Str 
financier who has admitted 
extensive illegal use of inside 
information. No private invea 
tars or companies have yet suc- 
ceeded in winning civil daroa; 
from Mr Boesky because of 1 
difficulty of proving that they 
had suffered any specific loss as 
a result of the disgraced finan- 
cier’s activities; 

Several draft bfQs to tighten 
the legislation have been .consid- 
ered by congressional commit- 
tees on Capitol Hill, but yester- 
day's speech gave the clearest 
Indication to date of the broad 
scope far action against inside 
traders which Mr Ruder, the 
nation's top financial enforce- 
ment official, would be seekrog. 

Mr Ruder also, predicted that 
Mr. Boesky would be 'sent to jaS 
when he comes up for sentenc- 
ing before a Federal Judge in the 
next few months. *T would be 
very surprised if he did not go to 
jail," he said. ■ 


Mexican inflation 
hits record 142% 

BY DAVID GARDNER BiiEXICO CITY 


MEXICAN -consumer 

8.3 per cent last mont 

inflation to a record 142 pin: cent 
a year. 

This is a 40 point rise on last 
year, and poses a severe. test, of 
the Government’s nerves In per- 
severing with itsstrategy of 
attacking inflation gradually. 

This is particularly so as Mr 
Carlos Salinas de Gortari, the 
young former planningmuuster- 
chosen -to succeed President 
MIgel de la Madrid next year, 
was the main architect - of cur*, 
rent economic polities, and in 
the public eye bears responsibil- 
ity for their success or failure. 

The main problem is consid- 
ered by officials like Dr Pedro 
Aspe, Mr Salinas’s succes s or and 
close economic adviser^to be 
“inflationary - inertia".: This is 
inflation left once the exchange 
rate is managed to competitive 
equilibrium; when the budget is 
in rough balance; and when rela- 
tive prices of key goods like “ 

oline have been Drought 


V 


rfSp;** * 


k 


there ministers stress the 
need for greater fiscal adjust- 
ment despite real budget ci ' 

I valent to 10 per cent 


.Carlo* Salinas: architect, 
of current policies 

believing this wffi both sharpen 
Mexico’s competitiveness, -and 
drive down prices. This has not 
so far happened, largely as a 
result at the' monopoly structure 
of Mexican industry and trade. 

It is not dear whether there fe 
room for further cuts, moreover. 


GDP since 1982. This year’s pub- 
lic sector deficit will be equiva- 
lent to about 18 per cent of GDP, 
the highest ever. 

The undervaluation of the. 
peso has also pushed prices up. 
“You cannot expect to make pay 
an undervalued exchange, rate 
and get rid of inflation," says a 
Bank of Mexico o ffidaL 

Mexico devalued the controlled 
rate it -uses for merchandise 
trade by 148 per cent last year* 
following the collapse in the 
price of ml, its main export The 
daily rate of devaluation of the 
peso against the dollar this year 
has lagged nearly 30 points 
behind inflation. But according 
to the Central Bank official the 
cushion of about 60 per cent 
undervaluation has been main- 
tained. 

the underpinning for Mexico’s 
successful non-oil export drive, 
while the Government has 
speeded up import liberalisation. 


year 

have yet to yield a higher tax 
taka. 

The government is therefore 
coming under g row i n g pressure 

to launch an anti-inflation.. pro- 
gramme, like the Cruzado plan 
in Brarfl, freezing prices and 
wages. 

Senior ministers frequently 
deny the Government is contem- 
plating a so-called- Azteca plan as 
it is known hoe; 

Though in theory the required 
indicators are close r to equilib- 
rium here than they were In 
either Brazil or Argentina, senter 
economic officials believe the 
Mexican economy has still not 
worked through the . external 
shock of high inteniaxioftal inter- 
est rates and low all prices nor 
that it has digested the struc- 
tural reforms, introduced to deal 
with both. 


obliged, "to eliminate an eco- 
nomic Inequality which it did 

not create". 

What has made Judge- Ken- 
nedy suspect to the idecfogicaHy 
pure Is a cas£ in which he 
upheld the Navy’s light to fire 
homosexuals.' The Navy, he said, 
could act on the “unique" needs 

of the military, 

However, he continued, homo- 
sexuals had a constitutional 
right to privacy. The right of pri- 
vacy he based on the Roe vs 
Wade decision, which legalised 
abortion, an anathema to right- 

to- lifers. 

Judge Kennedy for the most 
part fits the the President’s oft- 
stated requirement for a tough 
law-and-order judge.' He is 
unlikely to overturn criminal 
convictions on technicalities. Yet 
he has been known to reverse 
convictions in cases of dear vio- 
lations of the accused’s rights. 

Judge Kennedy, the son of a 
lawyer who served as. secretary 
to a California government dur- 
ing the Depression, is a Harvard 
Law School graduate. He spent 
six months studying at the Lon- 
don School of Economics. 

For a time his law practice 
included lobbying activities for 
the beer and friAyih fe* 

His friends insist that there are 
no skeletons in his closet, that he 
never sought to influence legisla- 
tors improperly . 


Hardliners 
force out 
Quebecois 
leader 

By Robert Gfeben* ki Montreal 

MR P1KKKE Mare Johnson, mod- 
erate leader of Canada's Parti 
Quebecois, has resigned after 
opposition from hardline sepa- 
ratists in tite party. 

Mr Johnson, 41, became leader 
in September 1985 and moved 
the party away from Mr Rene 
Levesque’s goal of political 
autonomy while economically 
linked with Canada. He was 
trounced in the December 1985 
election by the Quebec Liberals. 

A party convention six months 
ago anti provincial polls have 
confirmea the popularity of Mr 
Johnson and his polities. 

However, the party's separatist 
wing believes the party will sink 
into oblivion without its tradi- 
tional goal of independence. This 
wing includes several former 
ministers in the Levesque Gov- 
ernment, which ruled Quebec 
from 1976 to 1985. 

His opponents openly called 
for his resignation two weeks 
ago, arguing that his softness on 
independence was leading the 
party nowhere. They farced a 
caucus confrontation after which 
Mr Johnson resigned as leader 
and from his Montreal seat 
Mr Johnson, a lawyer and 
medical doctor, had failed to 
weld the PQ into an effective 
opposition party. Membership 
has fallen from 300,000 to about 
75,000. 


Tim Coone reports on evidence of a wide-ranging crime network 

Scandal behind Argentine murder 


THE discovery last week of the body in the 
Sivak kidnap opened a Pandora a box of 
awkward questions about the inner work- 
ings of the Argentine state. Despite almost 
four years of democratic rule it is still 
clearly plagued by powerful interest groups. 

. The answers, if they are ever publicly 
aired, may eventually end in an explosive 
political scandal involving kidnappings and 
inter national drug trafficking organised by 
police, and economic frauds % military dic- 
tators linked with politi c al scandals in Italy 
and guerrilla wars in Central America. It 
would stretch the imagi n ation of the most 
adventurous fiction writer. 

After two years of rumour and suspicion, 
details are finally coming to light that con- 
firm the existence in Argentina of a highly 
organised crime network run by senior mem- 
bers of the country's police force, probably 
carried out with ulterior political motiva- 
tion. 

This state-within -the-state already appears 
to have links with international drug traf- 
ficking which may eventually prove to be 
linked to major economic frauds carried out 
under military rule, and to the financing of 
the Nicaraguan Contras before the US Gov- 
ernment became openly involved in support- 



ing them. 


far four police officers have been, 
arrested, two of whom have confessed to 
participating in the kidnap and subsequent 
murder of the Argentine businessman Mr 
Oswaldo Sivak in 1985. His body was discov- 
ered in a shallow grave at the weekend on 
the outskirts of Buenos Aires, and the body 
of another businessman, Mr Benjamin Neu- 
mann who was kidnapped in 1982, was 
exhumed nearby on Tuesday. 

A total of S3.1m had been paid in ransoms 
to the kidnappers. One of the police officers, 
who owns a light aircraft, was already bring 
held on drug smuggling charges, while 


William Casey: bis death led to arrests 

another - Sub-Commissioner Alberto Loren- 
zatti - is a senior officer of the Federal Police 
in the municipality of Mercedes, 100km 
south of Buenos Aires. 

Mercedes Is the town where ex-Major 
Ernesto Barrrira, the officer who sparked 
last Easter's military rebellion, chose to 
make the first public presentation of a pro- 
military video made or the rebellion through 
a local cable network. 

A former military intelligence officer, Mr 
Raul Guglieminetti, who is accused of 
involvement in other kidnapping cases and 


was a fugitive in Europe, 
in Argentina in April this year at the" time of 
the Pope's visit and handed himself over to 
the police in Mercedes, where it was later 
discovered he also held an arms cache. 

Mr Goglieminetti was linked to another 


group of kidnappers, all military intelligence 
officers, who were arrested in Switzerland 
several years ago while coll ect ing a ransom. 
One of them, Mr Sanchez Rrisse, jumped bail 
and fled .to the US. He was arrested there 
earlier this year and was extradited to 
Argentina where he is now awaiting trial. 

Mr Rrisse has been photographed in Hon- 
duras alongside the Nicaraguan Contras and 
is thought to be one of the key Argentine 
connections with the CIA which helped 
establish the Contras as a military force 
before the US Goverment gave them finan- 
cial support. 

The ex-General Suarez Mason, -who faces 
over 600 charges in Argentina on human 
rights abuses, homicide, robbery and fraud, 
including running up S5bn of debts in the 
state oil company YPF, was also a fugitive in 
the US until January this year when he was 
arrested. He now awaits extradition. Mr 
Suarez Mason is thought to be one of the 
organisers of the Argentine military training 
programme to the Contras and was also a 
member of the P2 Masonic lodge in Italy 

It may be a coincidence, but the arrest of 
Mr Mason and Mr Reisse in the US, and the 
voluntary surrender by Mr Guglieminetti 
and Mr Gelli to the police, both- in places 
where they thought they were safe and 
might not face serious charges, all happened 
after the death of Mr William Casey, the 
head of the CIA. Mr Casey was a key figure 
behind the creation of the Contra army in 
Nicaragua. 

One question now being asked in Argen- 
tina is why it has taken so long to discover 
the kidnappers of Mr Sivak when members 
of his family have always maintained that 
the police were involved? The family has 
also publicly accused Mr Antonio TroccoH, 
the ex-interior Minister and a. dose friend of 
President Raul Alfonrin, of concealing evi- 
dence and holding up the investigations. 


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6 


Financial Times Thursday November 12 1987 


WORLD TRADE NEWS 


YEUTTER ADDRESSES UK BUSINESSMEN 


Protectionist pressure ‘easing in Congress’ 


BY PETER MONTAGNON. MOM TRADE HHTOR 


PROTECTIONIST pressure in the 
US Congress has abated since the 
plunge in Wall Street share 
prices a month ago; Mr Clayton 
Yeutter, US Trade Representa- 
tive said yesterday. 

"Protectionism has fewer sup- 
porters in the US today than it 
did four weeks ago,* he told busi- 
nessmen at the Confederation of 
British Industry. 

His remarks indicate a belief 
that Congress is now more fear- 
ful of the risk of repeating the 
notorious Smoot-Hawley tariff 
legislation which compounded 
the depression of the 1930s. 

The fad is that the dramatic 
decline in securities markets has 
caused everyone to sit back and 
re-examine their views on trade 
legislation.* Mr Yeutter said. 

However, he added that the 
jury was still out on the Question 
of whether Congress would move 
to pass an acceptable trade bin, 

US attacks 
Brazil on 
computers 

By Peter Montagnan, 

Worid Tad* Edttor 

THE US has lost patience with 
Brazil over its continuing deter- 
mination to protect its computer 
industry, Mr Clayton Yeutter, US 
Trade Representative, said yes- 
terday. 

Noting that the dispute over 
Brazil's policy on informatics, 
which includes telecommunica- 
tions equipment and computers, 
had been running for 18 months, 
he told an audience of business- 
men at the Confederation of 
British Industry that the US 
would have imposed sanctions 
long ago if Brazil had not been 
an indebted developing country. 

*We have been incredibly 
patient and tolerant with Brazil, 
Mr Yeutter said. 

He did not say when the US 
would actually impose sanctions, 
although this is widely expected 
in Washington to be announced 
next week. 

Brazil's policy was "indefensi- 
ble in every aspect and contrary 
to Brazil's own interest," he said. 

It could not be in Brazil's inter- 
ests to fend off computer soft- 
ware programming that was 
barfly needed to develop its awn 
industry. Because the software 
was not available locally, Brazil- 
ian companies would begin to 
pirate it, Mr Yeutter said- 

“Some day Brazil is going to 
regret following these policies," 
he added. 


which President Reagan could 
sign. 

Mr Yeutter said the Adminis- 
tration would like *a construc- 
tive, responsible piece of legisla- 
tion." He was confident that a 
Presidential veto could be sus- 
tained if one did not emerge. 

Despite the present Congressio- 
nal preoccupation with budget 
cuts and the nomination of a 
new Supreme Court judge, Mr 
Yeutter said he still hoped a bill 
would be ready for signing by 
late this year or early next. 

Repeating a call for interna- 
tional co-operation to help over- 
come the turmoil in financial 
markets and make for an orderly 
reduction in the US trade deficit, 
Mr Yeutter added that the need 

for such co-operation would not 
deter the Administration from 
pursuing an aggressive policy in 
dealing with bilateral trade dis- 
putes. 


This policy, in force for thV 
last two years, had resulted in 
many long-running disputes 
being settled, he said. ■ 

"Its worth doing in terms of 
moving towards a level playing 
field,” be said. 

“Having disputes is not sinful;: 
what’s sinful is letting them fes- 
ter for 20 years." 

Separately, in an address to 
the Royal Institutue of Interna- 
tional Affairs, Mr Yeutter said 
the US would support the adop- 
tion by the General Agreement 
on Tariffs and Trade of binding 
arbitration powers for the settle- 
ment of trade disputes as well as 
an enhanced role for Gatt in. sur- 
veillance of trade policy. 

Binding arbitration, which is 
strongly resisted by the Euro- 
pean Community, would theoret- 
ically mean an end to the pres- 
ent system where Gatt members 
can block adaption of a dispute 


ruling in which they are found 
to be at fault. 

Replying to a questioner whp. 
said that the 1 US would thus be- 
delegating authority to an uncer- 
tain outside process,' he said: 
“We’ve got to change .our view to 
some degree in that area. 

“It just seems ' evident to me 
that we have to have a strong 
Gatt going into the. 1990s and 
into the next century." / 

"It's not a question of giving 
up sovereignty, just -(accepting) 
the Involvement of someone 


Earlier, he complained thatthe 
US has "not had a lot of support 
ftom Europe" far it* campaign, jo 
negotiate new rules. on trade-re- 
lated investment inGatt, \ iV , . 

"We should have had Invest- 
ment rules in Gatt a long time 
ago,” he said. 



Yeottectrade bfU doubt 


Gatt finds trade protectionism js growing 


BY WILLIAM DULLFORCE 

TRADE protectionism has con- that the launching of the Uru- 
tinued to grow during the first guay Round has led governments 
year of the Uruguay Round of to look for long-term solutions. 

. -- «•— But it warns measures restricting 

or distorting trade taken during 
the six-month period continue to 
create doubts about govern- 
ments' readiness to follow Gatt 
rules. 

These doubts are compounded 
by the worry that national trade 
policies are moving towards 
greater protection. The main 
worry, the secretariat says, 
remains the US trade bill, stfil 
being thrashed out between Con- 
gress and the Reagan Adminis- 
tration, 

Its analysis of the 136 export 
restraint arrangements is partic- 
ularly unflattering for the Euro- 
pean Community and the US. No 


the General Agreement on Tar- 
iffs and Trade, according to the 
latest report from the Gatt secre- 
tariat. 

In the half-year to the end of 
September the secretariat listed 
135 "grey area" measures taken 
by governments to circumvent 
Gatt rules, up from 116 in the 
previous six months and 93 in 
the corresponding period of 1986. 

There has been no fall-off in 
the subsidy of farm exports and 
the secretariat singles out the 
increased funding for the US 
Export Enhancement Pro- 
gramme, which has boasted sales 
of US cereals worldwide and 
drawn angry protests from Aus- 
tralia and Argentina. 

In the confidential report it 
submitted to the Gatt council 
yesterday, the secretariat notes 


Steel and Steel products are exchanges. oyer Japanese con- 
. involved in the most trade-man- struction contracts and. telecom- 
aging agreement (38), followed mupication practices. 
by textiles- Q28X farm products: Debt and balance, pf payments 
(21 X auto m o b iles (14) and elec- problems again strongly fnflu- 
tronic products (111 enced developing countries’ 

The most aign meant develop- trade policies during the bail- 
ments during the half-year, m year. Some - Colombia, Morocco 
the Gatt secretariat's view, were and Indonesia - introduced trade 
the widening of the range of liberalising measures as part of 
South Korean exports to the US structural adjustment pro- 
covered by ‘voluntary* restraints grammes. Others - Peru earns a 
and the conclusion, by the US of spedaTm^ntian - retrqafed 'from 
eight bilateral agreements regu- earlier liberalisation.; 
lating imports of textflea. On a Gatt sees no signs, of- slowing 
more promising note, several, down in government-backed 
trade conflicts were oettiddL-"'' countertrade agreements which 
However, the 
remains unhappy 

potential for conflict -in some than ^5 per 
current disputes. These ' Include estimated to Involve forms of 


7 the quarrels arising from the ob&acertirade. Among the exam- 

less than 69 protect the EC or irodusiinr ofSptfn and PUrttrad rifos higMIghJed by tbeGMtoee- 
one of its members, while the US ui the EC, the row between Star retariai Is the city of Miami's 
has negotiated 48 bilateral agree- US and the EC over funding for plan to set m> an international 
mentsto guard its industries. Airbus aircraft and thfr sharp vimirency and barter exchange. 


US seeks inquiry into national labour standards 


BY WILLIAM DULUFORCE 
THE US yesterday asked the 
Gatt Council to establish a work- 
ing party to examine how 
national labour standards 
affected international trade and 
Gatt’s free-trade objectives. 

US trade officials have been 
pursuing this "workers' rights" 
issue under pressure from mem- 
bers of Congress who argue that 
some countries produce cheap 
export goods by exploiting 
labour. 

In July the US trade represen- 


tative's office agreed to petitions 
from the AFL-CIO and affiliated 
US trade unions that it examine 
the record on workers' rights- of 
Turkey, Taiwan, South Korea, 

Indonesia, Thailand and the Cen- 
tral African Republic. 

Earlier, in April, Washington 
cited the desire to encourage 
Third World countries to grant 
workers the right to or»mise as 

<Sf Imports fitfwta developing .aimed at 


i«nii|i| H under US G ener a l- tion;- -while .ensuring- that the 

bed System eg Pre f erences pro- fssuerwas raised in Gatt. The, US 
gramme. wap.nqt advocating any oohclu- 

This controversial ‘US aunts but: simply asking for a 

of trade with national, labour ^working party to study the issue: 
practices has been vehemently- " GattV working party would 
opposed by developing county -examine the "pourable relation- 
triesjn particular MtackxtThey ship of internationally recog- 
contend that^Ggtt? Is not the nised labour - standards’ to- inter- 
forum in which - terdbeuss the national trade", 
issue. . It would then co n sider any 

W-jjgBfc proposals’ that might bftjput for- 




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NZ favours 
free market 
link with 
Australia 

By Chris ShonMl M Sy*wy 

AUSTRALIA ud New Ze ala nd 
should consider taking their 
economic rdHtiomtip beyond 
content moves to a free trade 
area and towards a customs 
unio n nr even a single mar- 
ket. 

This suggestion came yes- 
terday from Mr David CaygfU, 
New Zealand’s Minis t er of 
Trade and Industry, when he 
addressed the annual confer- 
ence of the Australia and 
New Zealand Business Coun- 
cils in Sydney. 

The focus of the co nf er enc e 
Is the Closer Economic Rela- 
tions CCER) agreement 
between the two countries 
'after 1988, when the pact - 
now four years old - la due to 
be reviewed. 

Mr Cayglll said the question 
which needed answe rin g was 
whether the two countries 
simply wanted to remove 
‘ remaining hinA. Ip 

a successful free trade rela- 
tionship, or would rather 
have a wider-economic rela- 
tionship. 

According to Anstraliaa fig- 
ure*, trade across the Tasman 
Sea has almost doubled, from 
AS1.8bn in 1988-88 to AS&Sbn 
In 1986-87. Investment has 
also grown rapidly. 

Mr CaygUl said free trade 
in most product areas would 
be achieved well before the 
target date of 1996. He also 
pointed to the emergence of 
trans-Tasman .mi 

the way in which exporters In 
both countries were now 
looking beyond each other. 

In the review, he suggested, 
the jurisdiction of the Austra- 
lian and New Bsa trade 
practices, m erger and foreign 
investment regimes should be 
widened to embrace both 
countries. 

Other issues for consider- 
Lratioh should be technical bar- 
riers to trade, such as label- 
ling, - standards 'and 
Quarantine regulation*,. New 
Zealand! * antidumping laws 
and Australia’s use of^ boun- 
ties to assist domestic Indus- 
try. 

Mr CaygfU also said be was 
keen to see Australia padfo- 
-pate ba its government pure! 
chasi ng system. 

But all issues were best dis- 
cussed h'tte'fotunraik of 
an agreed foal uU a time 
limit. His preferebde, he inti- 

'ttfthe center. 

-W'r 1 


Japan set to resist 
Gatt call for reform 
of its liquor taxes 

BY IAN RODGER « TOKYO 


Yv 


Connecticut 
company' In 
Soviet link 


COMBUSTION Engineering of 
Connecticut became the first US 
company to enter a joint eco- 
nomic venture in the Soviet 
Union yesterday when it signed 
a contract involving; equipment 
for the petroleum Industry, Seu- 
ter reports from ^loaow. - 

Combustion : Engineering is 
going ahead with' a project, 
under a five-year agreement, for 
A factory employing up' to .300 
people, mostly Soviet citizens, 
for which it will supply com- 
puter software and put up an 
initial' sum worth about S8nt 

Under Moscow’s joint venture 
rules, the Soviet side takes a 51 
per cent financial stake In the 
venture which would be known 
by its Soviet acronym, PRIS, and 
would develop automated con- 
trol systems fra* all refining and 
petrochemical plants. - 

Computer software would be 
provided by the Americans while 
the Soviet side would contribute 
engineering equipment and 
tools, the company said. 

Capital- investment would 
amount to 316m over the first 
year. 

"We see a market of not less 
than 8200m over the next five 
years and not necessarily all 
Soviet," the company said. 

Combustion Engineering has 
nearly completed an 18-month 
contract to equip an ethylene 
plant at N ivlrmair amafc - near 

MO60OW. 




Japanesl 
group incurs 
export ban 


JAPAN Imposed a one- 
ramth export bu m a trad- 
ing company for Illegally 
exporting strategic high- 
tech goods to China, - n 
spokesman for the Ministry 
of International Trade and 
Ihdnatry (Hit!) said yester- 
day,. Reuter reports from 
Tokyo. 

Tome! Trading Co Ltd 
sold specialised electronic 
equipment - to China 
between 1984 and .1986, 
violating rules set down by 
the Paris-baaed Co-ordi- 
nated Committee on strate- 
gic exports (CoCom), he 


The ban, which takes 
effect fkom November 17, 
follows- 'the decision on 
October 27 by a district 
coart in Kobe, near 
to fine the company Tim 
(£4,000). The company, a 
China trade specialist based 
In Akashl in western Japan, 
failed to get ministry 
approval for exports ' of a 
signal generator and a-con- 
pater part for a circuit 
board tester for a colour 
television plant -and for 
parts for an electronic 
- scale, the MIti official said. 

A senior Tome! Trading 
official said:"We*re sorry 
'that we emitted or ignored 
* necessary export proce- 
dures to meet a delivery 


Venezuela plans to build 
aluminium smelter 


■^JOSEPH MANN M CARACAS . 

VENEZUELA’S largest alumin- 
ium maker, Venalum, will build 
a new aluminium- smelter with 
foreign partners. The amelter.to 
be constructed in the Guayana 
industrial zone of southeast 
Venezuela, will be capable of 
producing 860,000 tonnes per 
year of primary al uminium and 
wiU cost $L2bn. 

Industry sources said that -Ven- 
alum will hold 40 per cent of 
shares in the new venture, while 
another 40 per cent will be 
‘owned by Italpianti, a subsidiary 
of 'the. Italian . Government’s . 
industrial holding company,. IRL 

Pechiney of Prance will hold 
another 10 per cent in the new 
company and the remaining 10 
per cent will be owned either by 
Alcoa of the US or by a Japanese 
industrial concern, according to 
sources in Caracas. 

Mr Hector Hurtado, Venezue- 
la's Minister of finance, said he 
expected the Government to 
complete negotiations on the 
new aluminium plant by early 
December. 

Venalum is a highly profitable 
! joint venture set up in the 1970s 


by the Venezuelan Government 
and a group of Japanese compa- 
nies in. the heavy industry sec- 
tor. 

The new smelter is the latest 
in the Venezuelan Government’s 
big -push to increase the coun- 
try's aluminium smelting capac- 
ity. Venezuela is currently the 
Western world's lowest cost alu- 
minium producer, thanks to very 
low cost hydro-electric power 
generated by the Guri dam. 

At the same time, the Govern- 
ment is- planning a new smelter 
for .Venalum, two American 
banks - Bank of America and 
Chase M anhattan - are compet- 
ing on. a financing proposal for 
another aluminium smelter, to 
be built by Akssa, a joint ven- 
ture between the Venezuelan 
Government and Reynolds Inter- 
national of the US. 

Alcasa plans to build a 180,000 
tonnes per year smelter costing 
4670m, along with another group 
of foreign partners. The Govern- 
ment wishes to raise a major 
share of this money via export 
financing credits and a debt 
equity swap. 


CLAIMS by Japanese that their 
Government will respect this 
week's demands from a Gatt 
panel for reforms of its liquor 
tax system should be taken with 
a dram of whisky. 

In fort, the Japanese Govern- 
ment will try very hard to 
squirm out of meeting Gatt’s 
demands an this and food import 
quotas, because of strong politi- 
cal pressure from the domestic 
food and drinks industries for 
continued protection. 

■ The result could be the worst 
bout of trade friction yet 
between this country and Its 
major trading partners. Senior 
Japanese officials acknowledge 
privately that the problem Is 
very aenous, especially as it is 
likely to come to a head early in. 
theNew Year, just as the US 
Congress is putting the finishing 
touches on its omnibus trade bill 

Qne official said this week the 
prospect was far a nastier row 
than the one last spring between 
the US and Japan over semicon- 
ductor trade. In April, the US 
imposed 100 per cent punitive 
tariffs on a wide range of Japa- 
nese electrical goods in retafia-. 
tion for Japan's alleged infringe- 
ments of a bilateral chip trade 
agreement, though some of these 
have since been suspended. 

Japan would be particularly 
vulnerable to foreign criticism 
and retaliatory measures if it did 
not accept all the Gatt panel 
recommendations. The country 
is a leading beneficiary of the 
international free trading system 
organised. under the Gatt, and is 
a frequent and vociferous critic 
of other Governments' protec- 
tionist tendencies. 

Officials say the Govanment 
will indeed introduce some 
reform proposals in line with 
official statements made this 
week, probably In late December 
when next year’s tax and budget 
plans ace deckled. 

Btxrjhey doubt that any pro- 
posals-., that would win the 
approval of the ruling Liberal 
DeihoCratic Party would also be 
enough to satisfy the European 
Commission (In the liquor case) 


or the US (in the food products 

case). 

The problem for the Govern- 
ment is the political influence of 
the agricultural and drinks 

industries. The high Quality 
drinks industry, dominated by 
the giant Suntory, b thought to 
. have dose links with many lead- 
ing politicians. 

However, the makers of low- 
grade shackii, a rough spirit 
made from vegetables and fruit, 
popular in rural areas, very prob- 
ably have more political clout. 

At present. the tax on shochu 
is8 per cent compared with a 59 
per cent rate on special grade 
whisky. The Gatt panel has 
demanded the elimination of the 
grading system which makes this 
sort- of discrimination possible - 
but Japanese officials doubt that 
such a reform - which would 
necessitate an increase in taxes 
on shochu, is politically possible. 

They are more optimistic 
about winning political approval 
to to remove the discrimination 
in taxation -between domestic 
and almost all imported whis- 
kies,, but they doubt that will be 
enough to satisfy the EC. 

A similar partial reform pack- 
age was introduced last Decem- 
ber, but the EC found it totally 
unacceptable. In fact, it was the 
basis fra- the EC's complaint to 
Gatt which led to this week's 
disputes panel report. 

There is similarly strong 
domestic opposition to removing 
import quotas on 12 agricultural 
products, including peanuts and 
tomato ketchup, as demanded by 
the US. 

Another Gatt panel has just 
concluded its study of this issue 
and apparently recommend- 
ed that quotas be removed on 10 
of the 12 products involved. 

Government officials say the 
removal of these quotas would 
mean the destruction of many 
■ small agricultural sectors and 
jtitey doubt the LDP would be 
.'prepared to contemplate it. 
"Already this week, farm groups 
have begun lobbying the Gov- 
ernment openly. 


UK ECONOMIC INDICATORS 

ECONOMIC ACQUETS’- Indian of Industrial production, ma n ufacturing output 
(lflflO-100); aurineering- curio* (1880-100); retail tales volume (1880-100); retail' 
satai value (1880-1(10): resjataied lmemptoymwn (excluding school leavers) and 
unfilled vacancies (potia* AU seasonally aqastad. 



(ndL 

Mfe 


Dal 

RksS 

Unsm- 



pod. 

aatpat 


- voL 

value 

ptqjPM 

Vta 

2nd qtr. 

19*4 

1044 

97 

1214 

1544 

940* 

1754 

3rd qtr. 

1U4 

1054 

96 

123.7 

158.7 

3498 

2004 

4thqtr. 

111 a 

1074 

99 

1254 

1244 

2441 

2124 

1st qtr. 

uu 

1074 

95 . 

1254 

1574 

8473 

2104 


1124 

1994 

98 

1284 

1884 

2465 

226.1 

3rd qtr 




1214 

1714 

2427 

2414 

March 

m» 

1994 

95 

1394 

1574 

8440 

2104 

April 

1124 

1084 

94 

1804 

1694 

8418 

2134 

35 ty 

1124 

1094 

n 

1254 

1614 

2452 

2314 

June 

1114 

1094 

St ' 

1294 

1074 

24 ZS 

2834 

July 

UK 

U14 

M 

1214 

178.7 

3470 

2344 

Aug. 

UU 

1114 

98 

1834 

1714 

2429 

2374 

Sept 




1814 

1714 

2,770 

2514 



OUmJl-Bcr market sector, 
(materials and fuels' 
ctotbtag ( 1880 - 100 * 


grids, In sta lm ent goods, intermediate goods 
output, metal manufacture, hgtHfti, leather and 
“ monthly average). 



Onssstr 

InraE 

band. 

EUg. 

■fatal 

7ntUa 

nouag. 


. 

' goads 

goods 

caput 

ranis- 

etc. 

■aits* 

1995 

1st qtr. 

1984 

1814 

1164 

1014 

1094 

1024 

144 

2nd qtr. 

1004 

1014 

1154 

1014 

1104- 

1041 

194 

3rd qtr. 

1954 

101.7 

1174- 

1084 

1094 

1084 

19-4 


1994 

1034 

1154 

1054 

1154 

1047 

154 

1st qtr. ■ 

1984 

1034 

1194 

1054 

1144 

1024 

174 

2nd qtr 

non 

1084 

1184 

1054 

1204 

1004 

194 

3rd qtr 







194 

WSMI) 

1094 

1094 

118.7 

1064 

1214 

1024 

184 

■ » - - ■- 

noiui 

1984 

1054 - 

1194 

1074 

1104 

1014 

284 

t£? 

1194 

1084 

118 0 

1004 

1104 

1054 

194 

1114 

1034 

1194 

1004 

1314 

1054 

204 

Juno 

1117 

1084 ' 

1194 

1004 

1254 

1064 

294 

July 

1124 

1044 

1194 

1074 

UU 

1084 

204 


1124 

1044 

1314 

1054 

1274 

1194 

174 

194 


EXTERNAL tZAWHmfloa of export and Import vohuns (1880-100* visible 
balanct; c ur ran t balance (to* oU balance (to* leans of trade (1960-100* official 



5s2 

Import 

Vldble 

Current 

OB 

Torn 


votama 

balance 

balance 

balance 

trade 

1099 







fodqtE, 

1214 

1394 


■ +145 

4705 

102J5 

3rd qtr. . 

1214 

1894 

4M91 

■510 

4021 

1088 

‘"uSt 

1204 

1444 

■2.725 

-860 

4785 

100L9 

toqw- 

IwTTTM 

1234 

•1495 

*072 

4X464 

UU 

2nd qtr 

3rd qtr 
Mama • 

1204 

1204 

140.7 

159.7 


. -174 
•1298 

41438 

4942 

■ H 

■TTT1 

1204 

■ \ * ■ 

•417 

• v-185 

4484 

1004 

tc 

1814 


•520 

4-202 

4428 

ITT 

. 1234 

1444 

•4400 

•307 

4285 


June 

1234 

1894 

•740 

-11 

4245 

wrrr 

July 

1214 

1474 

■910 

■810 

4284 

B TT* 

A»W- 


1544 

4J39 

•829 

4374 

it"*- 

Sepi. 

LH 

1494 

•655 

-05 

4284 

103.7 

OOL 







USBa 


18 J» 


2LBS 

87.04 

3446 

301 

2744 

2941 


*4*1 

84*28 

301 

4L40 


lUCANCXAIrMoney supply ICO, 1(1 and M3 4 
bank starling lending in -private sector; " 


Cfwfltt; an seasonally adjusted. Clearing hunkbaaS rate (end period* 


at annual rate* 
net inflow; mramw 


2nd qtr. 
3rd qtr. 

Ut qtr. 
Spdqtr 
Sid qtr 

March 


June 

July 

Aug. 

Sept. 

Oct 





Bn* 

BS 






fenRngt 

fetllow 

emfltt 





An 

In 

In 

% 

- 84 

354 

274 

49*55 

M83 

4245 

10JM 

M 

MLS 

15.4 

-»«405 

158 

+792 

1040 

731 

154 

144 

410418 

*414 

♦444 

lLoe 

u 

304 

‘ 204 

♦9,788 

1405 

4959 

1090 

u 

39.7 

284 

♦8454 

14U 

41483 

940 

u 

254 

21.7 411445 

1411 

4549 

1040 


384 

Z94 

+8482 

647 

♦899 

1040 

. 04 

104 

384 

♦1478 

727 

♦410 . 

900 

55 

274 

9M 

+2450 

521 

♦294 

940 

4Jt 

904 

214 

*9481 

555 

+389 

040 

7.7 

844 

Z44 

44475 

347 

+341 

9.00 

74 

224 

214 

♦2,187 

687 

+206 

1040 

94 

1U 

204 

♦4488 

197 

4408 

1040 





127 


9J50 


IKTLAXIOIMndlces of eandngi (Jan 1880- 
**»« prices of manufactured 
1887-100* Reuters com 
> 100 ) 



f yP*"**-^*” M***" K*?): ba ste materials and Aids; whote- 
aad jabducts (1980-l00*ratail prices and food prime (Jan 
raod&j index (Sept 1931 -lQO)- trade weighted valix of 


1st qtr. 
2nd qtr. 
3rd qtr. 

1st qtr. 
2nd qtr 
3td qtr 
Maiti) 

££? 

Jena 

July 

Aug. 


1994 13*4 

184 * USlB 
187.4 IM 18 
lfiLft 1374 


Male 

—if 

I4U 

145.7 

1484 

1474 


nr 

au 

97 jr 
97.9 
99U 


Foods amity. Staffing 


994 3,825 

98.7 1,714 

983 >4«l 

983 1,008 


Ocx. 


lafcft uu 14M loojt 

19941 128-7 1SQJI 1014 

13L0 15 LC 302a 

1944 13&S 149.7 lOOuB 

IBM * 1284 1EQJ5 10L8 

198JL 1284 1514 1014 

2MjO 129.7 15ia lfiL9 

291 1904 lout m i w 

ttUt UU 151 JS 1024 

1914 UU 1024 

1384 152.7 

seasonally i Bmim 
■H terinaflMtaaa mmtei >iitatandIng.OTtm«ng fMfci««- 


1604 1480 

1014 1499 

1094 1447 

199.7 1439 

1014 1454 

1034 1412 

1014 1439 

1004 1482 

190.7 1455 

1004 1485 

1461 


7U 

7ea 

7X4 

684 

994 

794 

72J7 

714 

734 

784 

724 

724 

T34 

73 a 

724 


% 


7 


Financial Times Thursday November 12 1987 





NASDAQ has opened its first 
European office— NASDAQ International 
— in the heart of London’s financial district. 
Now it’s even easier for European companies 
to become a part of NASDAQ — the #1 U.S. 
stock market for overseas companies. 

Of the 128 companies whose shares 
trade as American Depositary Receipts 
(ADRs) in the U.S., 95 are NASDAQ ■ • 
companies . Three of every four ADR shares 
traded in the U.S. are traded in the 
NASDAQ market. 

The reason is the NASDAQ network. 
The world’s largest, best capitalized 
securities firms provide the markets and 

XTACTAA^fe sponsorship 
1 1 1 J/ -\H iESS F companies need 

i n t e r n a t i o n * i to succeed in the 


U.S. market. The average NASDAQ ADR 
has 13 dealers. That means greater access to 
investors and more research coverage. 

To increase access to capital, broaden 
your investor base, or simply follow your 
products to North America, come to 
NASDAQ International. We’re here. Our 
full-time staff will assist companies and 
provide on-site support to NASDAQ’s link 
with the SEAQ System of London’s 
International Stock Exchange, the world’s 
newest major electronic market. 

For more information, contact J. 
Lynton Jones, Executive Director, Europe, 
NASDAQ International, 

43 London Wall, London 
EC2M 5TB. Or call 
01-374-6969. 



NASDAQ is the National Association of Securities Dealers Automated Quotations System. 
NASDAQ replaces traditional stock exchange trading floors with computer screens. Dealers in 
hundreds of Ideations display bids to buy and offers to sell, competing for institutional and 
individual investor order flow openly and publicly — right on the computer screen. NASDAQ 
the model for the new' SEAQ System of the International Stock Exchange, is changing the way 
securities are traded around the world 


x • 




V' 


J- 






I ■' ? :**Z 

I V , w ■■ v ■ i»T^ ■*;.] 



sm 


TnT^rrrnuro m ro il» n 


li»Mil^U)ll> 


Ti [,-f n ■ ) ■ 1 1 » ^Tii | 


U: . 


t * •*’* '•, * >•*•*, • y t ■ ,<£+++ n 7 *vihc v 

fjV v‘k :' *- &• ' ?*.*=*- - • » V; *T« 
[>’H a’,-** 






top management 

Aged 25-35, candidates will possess: 


. • ViV.;KII. w>. ; : . j 

^.sixf.Sytx I - i * I ; frv. . * J 

• -Vi’’ ’ f * 'j 

#.* * J 3 • : : A rf * A- 'Mi 



• A University Degree. 

•Minimum 2 years experience in an audit function, preferably in an 
mtBrnatioiiafenvmMiineiit. 

• Fluency in English and one other European language. 

• Readiness to travel throughout Europe. 

Philip Morris offers: 

•The opportunity to utilise and develop your skills as part of a team 
of professionals within an innovative market-leading company. 

• First class career prospects. 

• Excellent salary and benefits. 

Please apply directly to Ian Bryson, Manager, Corporate Audit, 

Philip Morris, Avenue de Cour 107, 1001 Lausanne, Switzerland; 
or contact Greg Ripley at Robert Half, Roman House, Wood Street, 
London BC2Y 5BA. Telephone: 01-638 5191. 


F inan cial Recruitment Specialists 
London • Birmingham • Windsor - Manchester 


Divisional Finance Director 


Central London 

Our client is the Consumer Magazines Division of a major 
UK publishing group with a divisional turnover of £33 million. 
The Division controls twelve business units, operating across 
a wide range of activities — from publishing and magazine 
distribution to creative design, slimming dubs and exhibitions, 
The position of Finance Director demands strong technical 
skills complemented by initiative and flexibility. You will 
contribute to strategic decisions, control the finance function 
of diverse businesses and contribute lo the continuing 
enhancement of computerised systems. 

You will be a qualified Accountant, probably Chartered -- 
with strong experience of a broad range of business 
sectors. In your mid to late thirties you may have experience 


c. £30,000 + benefits 

in consultancy or financial investigations. Publishing 
experience would be useful, but not essential. 

Excellent benefits indode the opportunity to participate in 
share options and performance bonus scheme after a 
qualifying period. 

Please reply in confidence to Alison Hawley, quoting reference 
5063/FT on both envelope and letter. 


Management Consultancy Division 

P.O.BoxT98^ftiHgateHouse^260kiBaitey,LondofiEC4M7PL 



FINANCE DIRECTOR 

Warwickshire to £30000 + Car 

Our client is a substantial manufacturing company 
currently undergoing considerable modernisation and 
expansion of facilities. 

It now seeks a numerate, shirt-sleeved accountant 
aged 30-38 to be responsible for monthly and annual 
reporting, information systems development business 
planning and general financial and costing inputto 
commercial decision-making. 

Candidates should have a strong costing and 
shop-floor reporting background and the interpersonal 
skills to provide leadership and be acceptable at all 
levels within the company. 

Please reply in confidence with a comprehensive 
curriculum vitae including details of current earnings 
and a daytime telephone number to D. E. Shribman. 






THE COMPLETE FINANCIAL SELECTION SERVICE. 

Vernon House, Sicilian Avenue, London WC1 A 2QH. Tel: 01 -831 2323 


Chief accountant 

Oxon, c£25,000 + car 


For a major and cfiuerse retalng organisation whose tumorer now exceedsEKXJm. 
As the number two in a department of some fifty people, you wffl have 
day-to-day responsitHIty for the management of the accounts department. K8y 
performance areas wH be the provision of a total financial and management 
reportingservice, the enhancers; of financial cximrote and systems devetoprnent 
plus toe prevision of advice on the financial implications of business derisions, tn 
sucha large department, the management and motivational role is of prime 
importance. 

You should be quaified, aged 30-45 and have a minimum of five years’ post 
qualification experience gained within a retafl, distribution or service sector 
environment A sound grasp of management and financial accounting principles 
should be coupled with proven management abBty. 

Please write, enclosing curriculum vitae, to Stephen Smith, quoting ref. S141 
Applications win be acknowledged andfowartfed to our client unless a covering 
tetter gives contrary instructions. 



CIAL 

JING 



Our client is a subsidiary of a major financia l services 
group and as such forms part of one of the largest 
ftnnnHal organisations in the world. 


growth and domination of the marirotplace. 

In order to sustain these levels of success, high calibre 
individuals are sought to further strengthen the 
divisionalised financial planning function. 

Wfaridng within a small professional team, you will 
be responsible fertile provision of management 
information relating to profitability and costs. This will 
involve long and short term plans, capital expenditure 
forecasts and appraisals, profitability reports and 
internal costings. 


q ualified staff and imd 


ad-hoc projects. 


fill 

—£3 


Coopers 

&Lybrand 

Executive 

Selection 


Coopers & Lybrand 
Executive Selection 
Limited 

43 Temple Row 

Birmingham 

B25JT 


i i. < >■ s : 

_ : : m-kw!- . 

ytfSS&KiflWtt'XiX' t v .< • A I'X'! 


<amHida*n« will be newly q ualifie d accountants, 
aged 24-30, ideally experienced in analysis and PC 
work and with the potential to develop within thin 
challeng in g environment. 

Please apply directly to Margaret Hendry at Robert 
Half, Roman House, Wfaod Street, London EC2Y 5BA. 
Telephone 01-638 5191 or evenings, Suzzane Wood, 
01-676 5405. 

Financial Recmitment Specialists 
London -Birmingham ■ Windsor • Manchester 


Financial Controller 


East Anglia 


Heading up the financial function of 
this most important subsidiary in our 
clients American-owned business, 
will call for much more than 
excellent accounting skills— 
although these will of course be 
needed to undertake the planning, 
forecasting and budgeting 
applicable to a major Emuld-million 
enterprise. 

The role will also involve you in 
complex project costing and the 
interpretation of data for a 
demanding and profit-conscious 
Board, as well as developing the 
newly updated computer facilities to 
derive optimum benefit for your 
department. 


£25,000 + Car 


A future senior manager m 
industry— with all that implies— you 
are under 35 years and fully 
qualified. Already a- capable 
manager of people you are used to 
the style, thinkmg, and professional 
communication skills of big business. 

Our clients offer a superb package 
of benefits including pension and life 
assurance, BUPA, and relocation 
expenses to help you move to a 
most attractive rural setting. 

Write (enclosing a C.V.) to Mrs. E. 
Kitchen, Recruitment Manager, 
Executive Recruitment Advisory 
Services. 


Executive Recruitment Advisory Services, 
16 Thorpe Road, Norwich, NR1 1RY 


/ ftsi / INVESTOR'S 
GUIDE TO THE 
STOCK MARKET 

by Gordon Cummings 

The 'Big Bans’ has brought changes that affect the strategy 
and mariretoperatonsof private investors, both old hands and 
newcomers. Computerised awestment trading and advice 
accentuate the need for D+Y research, knowledge, and 
share deafing to avote becoming an Impersonal cog In robot- 
controled operations. 

Completely revised and updated In thefight of tee ‘Bfe Bang*. 
thteedKfon is the essanffaf handbook for those who manage 
their personal capital and savings in the stock marketThe 
author, Gordon Cumminaa, a chartered aooountant, draws on 
wee 50 yeartf experience as an active investor, financial 
commentator and investment advisor to eorplaini the workings 
of the stock market, and how to profit from it the D-l-Y way, as 
he has done successttiy. 

For the new or potential Investor, It provides an invaluable 
Introduction to the practices and procedures of the market; 
how to set ip and manage an Investment portfoflo and how to 
make the best use at your capital. 

Contents 

1 No mystique about the Stock E xchange 

2 Stocks tmd Shares 

3 The daring business 

4 Buying and sefing • 

5 Paper work to important 

6 Gits wtlti an edge 

7 Foreigners have a wxd fort 

8 Figures matter 

O Debenture and tom stook priorities 

10 Getting the preference 

11 Sharing the equity 

12 ThechangtogrnBrtat 

13 Potato creation and management 

14 Stock Exchange newcomers 

15 Other issues 

16 ’ftkeouars and mergers 

17 Some spedaKaed markets 

18 Natural resources ~ a baafc investment 

19 Going foreign parts 

20 Investment and unit trusts 

21 Good watch prevents misfortune 

22 Thoeedratted taxes 
Investor's glossary - Index 

PudbMied November 1966. 


Please return Ik The Martetfrig Dept, Financial Timas 

Business information. 

fVrlarbuhi ^CterkarmelRoad.LjmdmEClMGSA. 

ureter tonn w: 01-251 9321 .wee 23700 

PMCMarMdnNaaife) 


eepytejptoa* of INVESTOR'S GUDETOTHESTOCK- 


Ptomasondma copyfeopb 

■MKETI213). 

Price £9.50 UK or El 2/USSI 7 m 
I endue my cheque vduft EAJSS . 


i peytoto to FT Business 


I wish towbycredlcjrt (mark choice): 

□ VI* .□*«*“ □ Anerican Express Q Oners 














Financial Times Thursday November 12 1987 


UK NEWS 


ism 


- * j 




s 

?*E 

aIT 


Ministers clear way for 
privatisation of steel 


BY PETER RIDDELL, POLITICAL EDITOR 


THE GOVERNMENT has decided 
that the British Steed Corpora- 
tion will definitely be privatised 
before the next general election 
after the sharp improvement in 
its profits and financial position. 

The corporation will be sold as 
a whole and, although no Ann 
decision has been taken on tim- 
ing, the flotation is likely to be 
in the second half of this parlia- 
ment, from 1989 onwards. 

The decision in favour of pri- 
vatisation now taken by Lord 
Young, the Trade and Industry 
Secretary, and his ministerial 
colleagues, contrasts with the 
greater caution expressed during 
the general election this year 
when the sale of British Steel 
was not included in the Conser- 


vative Party's proposed legisla- 
tive programme. 

Mr Norman TebWt, then Con- 
servative Party chairman, said at 
an election press conference that 
British Steel was operating In a 
sector where there were consid- 
erable problems so ft was not a 
“very early candidate” for sale. 

However, both Industry and 
Treasury ministers are now keen 
to see British Steel privatised. 
With the exact timing of the 
sales of the electricity and water 
industries both uncertain, minis- 
ters want to see another major 
privatisation in the second half 
of this parliament. 

Another key influence Is the 
desire for privatisation of Sir 


corporation 
Its of £178m 
March, after 


Robert Scholey, who has been 

chairman of the corporation 
since last April. 

When the 
announced net 

for the year to 

the large losses of the early 
1980s, he said that 1990 would be 
the likely privatisation date, 
although if the Government 
wanted to do it sooner he would 
be "delighted.* But he added that 
an additional SiOOm of profits 
would be needed before sale. 

After borrowing of &l.lbn in 
1980-81 and 526m In the current 
financial year, the corporation Is 
being required to pay back to the 
Government and other lenders 
5100m in the year starting next 
April. 


Unions warned 
of weaker ties 
with Labour 

By Pfagp Baaa ett, labota Editor 

LABOUR PARTY leaders will in 
future want to keep their dis- 
tance from trade unions for dec- 1 
torsi reasons. Mr John Edmonds, 
general secretary of the GMB 
general union, forecast last 
night 

Giving a lecture in London, Mr 
Edmonds said that while a 
future Labour government 
would help unions to cope with 
recent years* unpleasant 
changes, unions should be "real- 
istic about the political support 
we can expect” 

While he welcomed discussion 
in the Trades Union Congress- 
about unions’ future roles, he 
said the "background growl of 
protest" from some unions 
against breaking with "tradi- 
tional' union values was a sad 
disappointment - 
He attacked union inflexibil- 
ity, insisting that members’ 
demands were divese and often 
contradictory; unions should 
recognise that “working people 
do not share our liking for uni- 
formity and tightly-controlled 
decision-making. 

However, he remained scepti- 
cal about the value of strike-nee 
deals being negotiated by the 
EETPU electricians and others, 
maintaining that there was no 
evidence that such agreements 
had helped unions gain a foot- 
hold in non-union companies. 


Top SDP man to 
quit active politics 


BY OUR POLmCAL EDITOR 

MR BELL RODGERS, one of the 
Soda! Democratic Party’s foun- 
ding members, is to leave active 
parly politics to become the first 
director-general of the Royal 
Institute of British Architects. 

The post- has been created 
after a report on Riba's organlsar 
tion by a firm of management 
consultants. 

Mr Rodgers, 59, intends to 
resign as * vice-president , of the 
SDP and as chairman of its 
finance committee because he 
believes his new role is incom- 
patible with front-line party poli- 
tics. He lost his _ 
seat in 1963 and failed to get It 
back at this June’s general elec- 
tion. 

He will be the first of the 


party's founding members for- 
mally to leave politics. But with 
Mr Roy Jenkins now in the 
House of Lords, only Mrs Shirley 
Williams, the party president, 
and Dr David Owen, the former 
leader and .sole survivor in the 
House of Commons, remain 
active. Mr Rodgers said last night 
that he remained to 

an SDP merger with the Liberals 
and was confident that a new, 
united party would regain public 

support. 

Riba, in central London, has a 
staff of 100 and an annual bud- 
it of about &4m a year. Mr 
said he was keen to be 

Ived in running something, 

after four years of lecturing, 
writing and political activity. 


An advertisement appeared in the 
Financial Times on 9 November 
promoting the hBM *87’ Exhibition at 
the Business Design Centre, London. 
This exhibition closed on Friday 6 
November. The Financial Times regrets 
any inconvenience caused to LBJVf. or to 
its readers 


In Brief 

Pit union 
set for 
talks on 
6-day week 

BRITISH COAL la to hold 
national mifc* with the Union of 
Democratic Mineworkers to dis- 
cuss the introduction, of flexible 
working which will allow six-day 
coal production, Charles Lead 
beater writes* 

The *niv«t indicate th.t the cor- 
poration may increasingly turn 
to the UDM to introduce six-day 
production not only at new pits 
in the Midlands of England, the 
UDM’s heartland, but in other 
coalfields as welL 

The talks reflect the corpora- 
tion’s mounting frustration with 
the leadership of the National 
Union of Mineworkers which has 
refused to negotiate on flexible 
working. The UDM broke away 
from the NUM during the year- 
long miners* strike in ISS5L 

New MD for Shorts 

Mr Roy McNulty has been 
ippainted managing director of 
he aircraft manufacturers, 
Shorts of Belfast, in succession 
to Sir Philip Foreman who 
retires next year. 

Strike talks Impasse 

Talks between the Post Office 
and union leaders, aimed at 
averting a Christmas postal 
strike, broke up after two hours 
without ageement. Talks will 
resume tomorrow. 

RAF tests radar ‘spies' 

RAF chiefs are evaluating the 
results of trials’ which coala lead 
to a network of radar "spies* 
being set up in Britain to moni- 
tor low-flying aircraft. Eleven 
pilots have been killed in crashes 
this year in the UK as a result of 
low-flying manoeuvres. 

Zeehrngge hero 

A 19-year-old diver who 
received no honours for rescuing 
three lorry drivers from the 
wreck of the Zeebrngge ferry has 
been named Man of the Year. Mr 
Eamoiui Fallen, of Pinder's 
Heath, Wakefield, was the only 
Royal Navy diver to go into the 
wreck. 


NOTICE OF REDEMPTION 

THE PROCTER & GAMBLE COMPANY 

----- Extendible Notes-Due December -15, 1994 • 

NOTICE IS HEREBY GIVEN that, pursuant to paragraph 7(b) of the Tinns and Conditions 
of the Notes described above I the -Notes”) the Company has elected to and shall redeem on 
December 15. 1987 I the “Redemption Date") all outstanding Notes at a redemption price of 
100"- of the principal amount thereof I the ‘"Redemption Price ). 

The Notes shall become due and payable on the Redemntion.Datc at the Redemption Price, 
which shall be paid upon presentation and surrender of the Notes, together with ail coupons 
thereto appertaining maturing after the Redemption Date, at the offices of the paying agents 
listed below. 

Coupon due December IS. 1987 should be detached and collected In the usual manner. 

The Notes to be redeemed will no longer be outstanding on and after the Redemption Date, in- 
terest on the Notes will cease to accrue from and after the Redemption Date, the coupons for such 
interest shall be void, and the sole right of a Noteholder shall be to receive the Redemption Price. 

Payments at the office of any paying agent wifl be made by check drawn on a bank in New York 
Citv or by transfer to a dollar account maintained by the payee wfth a bank in Europe. 

Anv pavment made within the United States or transferred to an account main tai n ed by a 
non-l)-b. payee with a bank in the United States may be subject to reporting to the United Stales 
Internal Revenue Service f IRS) and to backup withholding at a rate of 20% if payees not 
Kipfents feii to provide the paying agent with an executed IRS Form W-8 

.Payments to 
Ito provide 


appropriate) to avoid 20°u withholding of the payment. Failure to provide 
identification number may also subject a US. payee to a penalty of 550. 


PAYING AGENTS 


Morgan Guaranty Trust Company 
of New York 

Morgan House. 1 Angel Court 
London EC2R 7AE. Eng la nd 


Morgan Guaranty Trust Company 
of New York 
Avenue des Arts 35 
B-I040 Brussels. B el giu m . 

Union Bank of Switzerland 
Bahahoferrasse 45 
CH-8021 

Zurich, Switzerland 


Dated: November 12. 1987 


Morgan Guaranty Trust Co mpan y 
of New York 
Maimer Landstrasse 46 
6000 Frankfurt-am-Main 
West Germany 

Amstardam-Rotterdam Bank N.V. 
Post bus 283 
Amsterdam 
The Netherlands 

Kiedletbank 5.A. Lnxembourgeoise 
43 Boulevard Royal 
Boite Postale 1108 
Luxembourg, Luxembourg 

THE PROCTER & GAMBLE COMPANY 

By; Motgm Guaranty Tmt i 
(wnevwsx. Focal and Paying* 


MINERALS AND RESOURCES CORPORATION LIMITED 


MNOBCO* 


At a Special General Meeting of tinoholdes of Minerals and Re sour ces 
Corporation Limittd hrU in Bermuda oa November 6, 1987, shareholders voted 
www Ii din' B igly in fironnr nf Ae SAertie ftf Ar ran g n nmt mvlrt* which Ordinary 
jharehrfdra in Minerals and Renames Corporation Limited will motive one new 
Onfimiy Are mMmorre (a company Mco^c ra ted in Laxanboargwfaidi is to 


held in Mznexafc and RcsoarcraGaapocatna Loaned az the dose of badness on 
November 26, 1987. 

Subsequent^ on November 10, 1987, dm S up re me Court of Bermuda 
sanctioned die Scheme which w3I become eff e ctive oa November 27, 1987. 

P^gwf»-wv l th whfikferK will imra- rfefinim— ntrifirarg* fcir rhrir TmlHmgS iU the 

new parent company Mmorco, within appiaxhnazely twenty eight day* thereafter 
Arrangements in relation to holders oEsbaie warrants id beanx wiD be die subject of 
a further adverusanaif in the Press. 

November 11, 1987 




Garanti is Right on T&rggt 

As Turkish business expands internationally, timely, 
flexible banking services and effective solutions to difficult 
problems are needed, as is die scope of an international 
finance institution. 

That's what Garanti Bankasi provides. 

The Credit Marketing Group gives a total package of 
banking services to corporate customers. Hie International 
Group is expert in bank-to-bank. transactions and delivers 
pre-export financing, tosses of guarantee and credit, and 
forfeiting options. The Capital Market Group underwrites new 
issues of private corporate bonds as well as dealing in 
commercial paper and securities. The Treasury is active in 
the foreign exchange and money markets. 

Garanti Bankasi comes through for its customers, and 
for its 400 correspondent banks worldwide. Let us crane 
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YOU CAN BANK ON 

GARANTI 


Ml Sofenaz^asfan, i 
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141-142 Fmdunh St lundan EC3M (pi) 626 3803 Tbc 8813102 gab g 




l 





Financial Times Thursday November 1 2 1987 


Pit closures near figure 
forecast by Scargill 


BY MAURICE SAMUELSON 


THE NUMBER of colliery clo- 
sures since the miners' strike 
ended in 1985 is likely to reach 




70 this financial year, close to 
the figure claimed to be on a 


Coal Board so-called hit list by 
Mr Arthur ScarrilL National 


Mr Arthur Scargill, National 
Union of Mine workers president, 
before the pit strike began. 

That emerged from British 
Coal's half-yearly figures, pub- 
lished yesterday, showing that 
66 collieries have closed since 
March 1985. 

The corporation also said more 
of the remaining 103 might be 
shut by the financial year's end. 

That would take the number 
of operating collieries below 100 
for the first time and mean job 
losses on top of the 83,500 volun- 
tary redundancies recorded since 


H?'. 




... 






I iatrS--'' J 


Lhe year-long strike. 

The further contraction is the 
industry's price for trying to 
break even In 1988-89, to which 
British Coal remains committed 
in spite of a deteriorating com- 
mercial climate. 

Sir Robert Haslam, British Coal 


Sir Robert B aslant: farther 
action needed 


chairman, announcing the fig- 
ures in London, said the 5104m 
operating profit achieved in the 
first half was consistent with 
that aim. However, the task 
would become even more diffi- 
cult if sales continued to be cut 


by market conditions, unfavour- 
able exchange-rate movements 


able exchange- rate movements 
and by industrial action. 

He said that to achieve the 
break-even target *we will need 
to take further action to reduce 


remaining high-cast capacity In 
the next six months, even 
though this involves higher 
exceptional restructuring and 
social costs." 

He said the action’s severity 
and depth would be determined 
by the union's willingness to 
abandon its overtime ban and to 
identify with progress made in 
the immediate past. 

Since the strike's end, produc- 
tivity had risen by 45 per cent, 
mainly by installation of 
heavy-duty face equipment; col- 
liery operating costs had fallen 


23 per cent; and average prices 
for customers had fallen 15 per 
cent In real terms. 

The losses after interest repay- 
ments in the first half had fallen 
to 59 1m from the 5157m In the 
corresponding period last year. 
Exceptional restructuring and 
social costs were down from 
583m to 545m. The overall defi- 
cit for the half-year was 5136m, 
compared with 5240m a year 
ago. 

Sir Robert said that to hold 
BC’s market volume, in the face . 
of falling world energy prices, its 
prices had been cut by more 
than 5500m since April last year. 

Those trends had also further 
highlighted the corporation's 
need to maximise output from 
opencast sites. That, at 7.4m 
tonnes, was the third-high est 
ever for the opening half of a 
year. 

However, British Coal was con- 
cerned at the growing difficulty 
of obtaining consent for new 
opencast sites because of local 
environmental opposition and, 
indirectly, because of the union, 
which saw opencast mining as a 
threat to deep mines. 

The corporation said that coin- 
cided with a change in planning 
procedures for opencast sites. Its 
previous planning success rate of 
more than 90 per cent fell 
recently to 50 per cent under 
procedures giving the Environ- 
ment Department final say. 

British Coal talks 
with UDM, Page 12 


US issues 
extradition 
warrant 
for Parnes 


UK NEWS - 

u f s Call for ‘significant 9 tax reform scheme 


BY PHtUP STEPHENS, ECONOMICS CORRESPONDENT 


A STRONG CALL for the Gov- 
ernment to use the first Budget 
of the present parliament to 
begin a significant prograrnmeof 
tax reform was made yesterday 
by the Institute of Fiscal Studies. 


The report presents a range of 
tttans for change, ranging from 


By Raymond Hughes, 

Law Courts Correspondent 


A WARRANT for the extra- 
dition from the US of Mr 
Anthony Parnes, the Lon- 
don stockbroker who is In 
custody in Los Angeles, was 
issued yesterday. Mr Fames 
faces criminal charges La 
the UK arising out of the 
Guinness affair. 

The. warrant was signed 
after a private hearing at 


The institute, an Independent 
think tank, said: “There has 
never been a better moment for 
tax reform." Because it was early 
in the life of the parliament, the 
potential political backlash from 
those who lost by changes In the 
system would be limited. 


options for change, ranging from 
relatively minor alterations to a 
much more radical restructuring 
of the system. It concedes that a 
big overhaul would not be posa- 
ble in one Budget and perhaps 
not even in a single. parliament, 
but suggests that substantial 
progress could be made if the 
Government adopted a coherent 


programme, 

The Government's guiding 
mind ole for income tax should 


Bow -Street magistrates 
court in London. Papers in 
the case win be forwarded 
to the US with a request for 
Mr Faroes's extradition. 


Mr Parnes was arrested 
when he arrived in Los 
Angeles from Paris on Sep- 
tember SO. The arrest was 
made by FBI agents acting 
on a warrant, obtained In 


In parallel, the present buoy- 
ancy of government revenues 
means there is money available 
to lubricate the reforms with an 
overall tax cut. 

In a report presented at a con- 
ference in London yesterday, IFS 
economists highlight the chaotic, 
and inefficient nature of much 
of the present tax system as it 
applies to both companies and 
Inaividuals. 


principle for income tax should 
be to replace the present struc- 
ture with a much ampler system 
with few marginal rates of tax. 
The marginal rate - the amount 
of tax paid on each additional 
pound of income - is. the key 
factor in influencing incentives. 

The EFS says it is possible to 
retain a progressive system. In 
wirfch tax payments rise with 
incomes, with only a few mar- 
ginal rates, although any over- 
haul is complicated by the pres- 


ent system of separate social 

opt to tidy UP the present sys- 
tem, with a further cut In the 
basic- rate and a rationalisation 
of the existing higher rate bands- 
More significant changes might 
involve abolishing the ceiling on 
National Insurance contributions 
and introducing a separate 35 
per cent rate for dividend ana 
interest income. 

The most radical, but also the 
most efficient and fab- reform, 
would be full integration of the 
tax and National Insurance 
Systems. 

That might be combined with 
significant changes to the pres- 
ent structure of taxation for hus- 
band and wives, which th e IFS 
says is manifestly overgenerous 
to two-earner couples. 

The Government had ruled out 
a switch to a system of fully 


transferable allowance*, but it 
could make considerable prog- 
ress towards a more equitable 
structure with the Introduction 
of partially transferable allow- 
ances. 

The IFS also calls for an over* 
haul of universal child benefit, 
which it says Is a wasteful use of 
scarce social security resources. 


A much better system would 
Involve payment of child benefit 
to all families but with the bet- 
ter-off facing a "clawback" 
through the tax system. 

Among the options for benefi- 
cial Changes in company taxa- 
tion, the study lists the reintrod- 
uction of stock relief for 
corporation tax or the indexa- 
tion of depreciation allowances 
and the abolition of licence roy- 
alties for North Sea oil operators. 

Tax Reform : Options Jo? Vie 
Third Term, fFS, 180-138 
Tottenham Court Road, London 
W1P9LR.SL6. 


London by the Metropolitan 
Police frond squad, alleging 
four offences of false 
accounting, involving 
53.4m. 

After the extradition 
request has been made, via 
the Foreign Office »i«d the 
State Department, the mat- 
ter will go to the federal 
court in Los Angeles. 

If extradition is orde r ed, 
Mr Parnes is likely to 
appeal. As extradition is a 
federal matter, the case 
might end np in the US 
Supreme Court. 


Ministry boost for BT rival 


BY LYNTON McUUN AND DAVID THOMAS 


THE DEPARTMENT of Educa- 
tion and Science has switched to 
Mercury, BTs only competitor, 
for the bulk of its outgoing tele- 
phone calls in a drive to cut 
departmental running costs. 


The department is understood 
3 be the first government 


to be the first government 
department to have switched 
from the British Telecom for the 
supply of telephone services. The 
change is regarded In Whitehall 
as an important step for a gov- 
ernment department 


The Cabinet Office also cut Its 
telephone expenses by 540,000 in 
annual running costs by buying 
instead of renting a new switch- 
board. Similar savings are expec- 
ted in the next two years. 

The Department of Health and 
Social Security has achieved 'sig- 
nificant savings," understood to 
be 51m in 1986-87, by purchas- 
ing telecomm uni cation equip- 
ment that had previously been 
rented. 


phone running costs by buying 
telephones and extension wiring 


Homes choice plan for Scots 


BY JAKES BUXTON, SCOTTISH CORRESPONDENT 


IMPORTANT REFORMS of hous- 
ing in Scotland designed to give 
Scots a wider choice and better 
living conditions were proposed 
by the Government yesterday. 

They include measures to 
allow tenants to transfer from 
local authorities to other land- 
lords. 

The Government is to legislate 
in the current session of Parlia- 
ment to set up an agency named 
Scottish Homes, which will com- 
bine the functions of the Scot- 
tish Special Housing Association 
and the Housing Corporation in 
Scotland. 

It says it hopes Scottish Homes 
will match tne success of the 
Scottish Development Agency in 
the economic field as a dynamic 
agent of change in housing 

The idea of Scottish Homes 
was the subject of consultation 
in Scotland after its announce- 
ment in May this year. 


The Scottish Office proposals 
match those recently put for- 
ward by Mr Nicholas Ridley, 
Environment Secretary, for 
England and Wales, Scotland, 
however, has a much lower level 
of owner-occupation than 
England. 

The level of owner occupation 
in Scotland is 42 per cent, 
against' England's 64 per cent. 
However, it has risen from 35 
per cent since 1979, due mainly 
to the sale of council homes. 

The broad aim of the proposals 
is to give people greater responsi- 
bility for the conditions in which 
they live. The theme of increas- 
ing people's personal responsibii- 


dilute the very large council 
estates and to improve their 
management. 


Council tenants will be 
allowed to transfer their tenan- 
cies to other landlords, which 
may be either established hous- 
ing associations or commercial 
landlords. Tenants will be 
allowed to form co-operatives 
with their neighbours. All land- 
lords will have to be approved 
by Scottish Homes. 


The US appeals proce- 
dures ore unlikely to have 
been exhausted by April 12 
next year, when Bow Street 
court will fix a date for the 
committal for trial hearings 
of Mr Ernest Sonndexs, for- 
mer Guinness chairman, Mr 
Gerald Rouson, chairman of 
Heron Corporation, Mr 
Eager SeeUg, former corpo- 
rate finance director of 
Morgan Grenfell, and finan- 
cier Sir Jack Lyons. 

Mr Pontes last appeared 
in the Los Angeles coart on 
October 29, when bail woe 
refused. The court was told 
he was to be charged with 
18 offences relating to the 
Guinness affair. Including 
the theft of 515Am. 


The department expects to 
save 530,600 a year as a result of 
the switch, according to the . first 
report on government purchas- 
ing from the Central Unit on 
Purchasing, published yesterday 
by the Treasury. 


The Welsh Office also made 
savings, estimated at more than 
25 per cent, in its telephone costs 
by buying Instead of renting 
telephones and by introducing 


telephone logging of calls. 

Tne Department of Trade and 
Industry cut its annual tele- 


telephones and extension wiring 
at three locations. 

' Information on the amount of 
business Mercury does In the rest 
Of Whitehall Is sketchy, although 
the company said last night that 
several large departments were 
its customers. It said it could not 
name them without their permis- 
sion. 

The Treasury said it did not 
know of any other government 
departments that had switched 
to Mercury. The Central Com- 
puter and Telecommunications 
Agency, responsible for advising 
government departments on tele- 
communications policy, also said 
U had not collected Information 
about this, although it used Mer- 
cury itself. 


National 
Freight may 
buy US group 

By Lynton McLain 


NATIONAL FREIGHT Corpora- 
tion's international division may 
buy Allied Van Lines, the largest 
US interstate removals company, 
for an undisclosed sum. 


NFC, owned by its employees 


and managers, agreed in princi- 
ple to buy AVL, which wifi inte- 
grate with 


grate with Pickfords Removals, 
an NFC company said to be 
Europe's largest business and 
household removals company. 


Officials ‘cut £286m costs 9 


The merger would create an 
Integrated worldwide removals 
network. AVL, of Chicago, has a 
turnover of almost S6Q0m 
(5334.3m) and an Interstate net- 
work of TOO agents. 

The proposal is subject to con- 
ditions. ALV stockholders vote 
on it early next year. 


BY LYNTON MCLAIN 


GOVERNMENT DEPARTMENTS 
achieved value-for-money 
savings worth 5286m in 1986-87 
on tne goods they bought, 
according to the first report of 
the Centra! Unit on Purchasing, 
published yesterday. 


ity was spelt out last week by Mr 
Malcolm Rifldnd, Scottish Secre- 


tary, as a leading theme of Con- 
servative government policy for 
Scotland in the Government's 
third term. 

The proposals are Intended to 


The proposals would mean 
greater mvolvement by the pri- 
vate sector in housing. In the 
private rented sector, new let- 
tings by private landlords are to 
be deregulated, although the 
regime for existing tenants will 
not be substantially altered. 


The previous day the High 
Court in London had heard 


That was 4.7 per cent of the 
56.074bn spent on purchasing 


Housing: The Government's 
Propo sal s for Scotland. HMSO. 
£3.60. 


Court m London hod heard 
that Mr Parnes had agreed 
to repay about S2a to Guin- 
ness in settlement of a civil 
action brought by the com- 
pany. 

After the London hearing, 
his solicitors said the agree- 
ment was not related to Ms 
■mat in the US "upon 
charges which he stead- 
fastly denies.* 


and supply of equipment and 
building projects by all depart- 
ments except the Ministry, of 
Defence. 


The unit described the figures 
as encouraging, but Mrs 
Thatcher, the Prime Minister, 
pointed out in a Commons writ- 
ten answer that the report 
emphasises that a great deal 
remains to be done. 

The unit, formed as an autono- 


mous body within the Treasury 
in August ' 1985, had set a. target 
of 5400m savings for the year to 
April 1987. The deadline for 
achieving that has been moved 
to April 1988 because the unit 
was not fully operational until 
early last year. 

The savings have been mode 
by improving contract and pay- 
ment terms; developing ahaim. 
tive sources of supply; consoli- 
dating purchases to achieve 
quantity discounts; keener nego- 
tiation where appropriate; and 
reductions in stockholdings. 

In 1985-86 deportments 
reported only 570m in value-for- 
money improvements. In March 
1986 the departments set them- 
selves a target. of :5109m for 


1986-87, but achieved 5177m 
more than that ' 

They have set themselves a 
5388m target this financial yean 
For 1988-89 their target is 5477m 
- 7 per cent of forecast expendi- 
ture on purchasing and supply. . 


Budweiser gives up 
TV sport backing 


The report concludes: "It Is 
-uciaL if the current ra omen- 


crucial, if the current momen- 
tum is to be maintained, that all 
departments in the next 12 
months improve and streamline 
their organisation to lower pur- 
chasing overheads and provide a 
systematic approach to identify- 
ing opportunities for further val- 
ue-for-money improvements." 

. Government Purchasing; 
Progress Report ,lo the. Prime 
Minister from the Central Unit 


BUDWEISER, the Anheuser- 
Busch beer brand of the US, has 
withdrawn, its sponsorship for 
the American football pro- 
gramme on Channel 4 television. 


Channel 4 said yesterday it 
had been informed by Budweiser 
that it was withdrawing its spon- 


that it was withdrawing its spon- 
sorship, worth more than 


on Purchasing: HM Treasury 
Nov 1987. HMSO. £ 3.50 . 


5100,000 a year. It is believed 
that Anheuser-Busch dedded to 
withdraw sponsorship because of 
what It saw as-inadequate expo- 
sure for its brand arid growing 
'dissatisfaction with -the produc- 
tion quality,' 


MONOPOLIES AND MERGERS COMMISSION REPORT ON THE BA-BCAL MERGER 

nil mire fnr nnmnntitinn day Harris looks at possible takeover terms 


Revised link plan allows for competition 


BY MICHAEL DONNE, AEROSPACE CORRESPONDENT 


THE MONOPOLIES and Mergers 
Commission has ruled that the 
proposed merger between British 
Airways and British Caledonian 
Airways can go ahead, on the 


Travel trade fears for Gatwick airport 


basis of new proposals put for- 
ward by BA aimed at removing 
many or the merger’s likely 
anti -competitive effects. 

The commission's approval is 
disclosed in an 89-page report, 
published yesterday, which Lord 
Young, Trade and Industry Sec- 
retary. has accepted. Sir Godfray 
Le Quesne, chairman of the com- 
mission. took personal charge of 
the study. 

It is now open for BA to make 
a new offer for BCal, which it is 
expected to do in a few weeks. 
Its original 5237m bid has for- 
mally lapsed. 

The report makes clear that 
the commission considered that 
the original proposals submitted 
by BA were likely to operate 
against Lhe public interest, espe- 


BRTTAIN’S travel trade 
fears that holidaymakers 
might be forced away from 
Gatwick airport by the pro- 
posed merger of British Air- 
ways and British Caledo- 
nian, writes David Churchill 
in Innsbruck. 

Travel agents and tour 
operators, meeting yester- 
day in Innsbruck at the 
annual conference of the 
Association of British 
Travel Agents, called for 
charter airline passengers 
to be protected if BA gained 
dominance over Gatwick 
airport as well as Heath- 
row. 

Mr Keith St Clair, chair- 


man of Sol Holidays and a 
member of the Abta Tour 
Operators Connell, sold: 
“Holidaymakers could be 
forced to travel to distant 
airports and hence pay 
higher prices.” 

Mr John Boyle, managing 
director of Falcon Leisure, 
added: “Holidaymakers on 
charter flights most not be 
allowed to become 
second-class passengers to 
the business traveller. Coo- 
sunen should be allowed to 
go on holiday from the air- 
port of their choice." 

Abta, which represents 
more than 90 per cent of UK 
travel agents and tour oper- 


ators, is seeking urgent 
meetings with the Depart- 
ments of Trade and Indus- 
try and Transport to 
express its concern. 

Mr Jack S mi th, the associ- 
ation's preaiteii, said: "We 
want clear safeguards to 
ensure that a proper bal- 
ance will be maintained of 
charter and scheduled traf- 
fic at key airports, espe- 
cially Gatwick.” 


strength to the detriment of 
other operators there. The oppor- 
tunities for growth and develop- 
ment of other airlines will be 


correspondingly Increased." 
Moreover, the risk of predatory 


Airline has 21 days to decide 
on worth of second carrier 


or anti-competitive conduct by 
the merged airline will be 
reduced. 

At the same time, says the 
commission, BA’s proposals 
would also reduce the possibility 
of any subsequent infringement 
of Article 86 of the Treaty of 
Rome, which rules against anti- 
competitive behaviour. 

The CAA, in a long statement 
on the commission's report, says 
it believes the arrangements 
approved by the commission go 
a considerable way towards safe- 
guarding a competitive multi-air- 
fine industry, which it feels will 
be in the best interests of the 
travelling public as well as of the 
UK as a whole. 

It adds: "The CAA did not 
oppose the takeover, accepting, 
as did almost all those who gave 
evidence, that BCal could not go 
on as they were. 

"The authority concentrated 
on proposing conditions that 
would as far as possible ensure 
that genuine competition would 
continue to take place between 
British airlines in the new envi- 
ronment that would be created if 
the merger went ahead. 

‘It is a matter of regret, as 
others have recognised, that 
BCal is no longer able to sustain 
the role of Britain's second-force 
scheduled service airline, ft is 
difficult to see any other single 
airline taking over that role and, 
therefore, the concept itself no 
longer appears to have a viable 
future. 

"None the less, it is posable to 
envisage circumstances in which 
a variety of different British air- 
lines compete vigorously with 

British Airways on different 
routes and in different markets. 
That is the direction in which 
the authority would now like to 
see the industry develop." 

The CAA says It would liked to 
have seen BA offering to give up 
more of BCal's European routes 
than it has done. 

If the takeover goes ahead the 
applications ter BA to the CAA to 
revoke the BCal licences will fol- 
low within one month. Those 
applications will probably be 
heard, along with the applica- 
tions by other airlines to serve 
those routes, in the first half ol 
next year. 

The CAA also said there was 
no reason to fear any break In 
continuity of services through 
the surrender by BA of the BCal 
licences on certain routes. BA 
has undertaken to continue serv- 
ing those routes until the neces- 
sary applications have been dealt 
with. 


Travel agents pointed out 
that about 60 per cent of all 
air passengers in Europe 
travel on charter airlines 
rather t h a n on scheduled 
services. 


cially in the light of the submis- 
sions from other airlines and 


sions from other airlines and 
interested parties. As a result, 
the original bid would have been 
disallowed. 

Only by coming forward with 
its revised set of proposals has 
BA been able to save its merger 
plan and win approval for It 
from the commission. 

Since the commission believes 


tl * merger will not be against 
the public interest, Lord Young 
has no power, under the mergers 
act, to prevent it. 

However, Lord Young made 
dear yesterday that he would act 
swiftly against BA if, in making 
its new offer, the airline in any 
way departed from the proposals 
it made to the commission. 

In addition, as the merger pro- 
ceeds it will be closely watched 
by the Civil Aviation Authority 
(CAA). Mr Christopher Tugen- 
dhat, its chairman, has under- 
taken to report in about a year to 
Mr Paul Channon. Transport 
Secretary, on the progress being 
made in implementing all the 
new BA proposals. 

The commission says that, dur- 
ing its study, it identified a num- 
ber of possible detriments to the 
proposed merger. 

It was noted that the removal 
of competition between BA and 
BCal would leave some routes on 
which there would be little com- 
petition for the merged airline; 
Lhat the airline would occupy a 


foreign airlines worldwide; it 
would bring financial savings 
through the merger of activities; 
and it would remove any risk of 
the enforced liquidation of BCal 
- which faces financial difficul- 
ties • or the breaking up of its 
business. 

The commission says: "Liqui- 
dation or break-up would lead to 
the interruption of BCal 'a ser- 
vices, and possibly to the cessa- 
tion of some of them. Several 
thousand BCal employees would 


sels, Copenhagen, Frankfurt, 
Geneva, Munich, Paris and Zur- 
ich. 


of 5,000 takeoff slots at Gatwick, 
spread reasonably through the 
year. 


• BA will retain the right, how- 
ever, to reapply for the re-issue 
of any of those licences, its appli- 
cations having no priority and 
considered on the same basis as 
any other applicant 


• BA will continue to offer to 
other airlines, without discrimi- 
nation, the maintenance and 
repair facilities at present made 
available to them at Gatwick by 
BCal. 


face uncertainty, or even Ices, of 
employment. There must be 
some advantage in a solution 
which mitigates these possibili- 
ties. 

"We have to assess the conse- 
quences to be expected of the 
merger proposals as they have 
now been developed, balancing 
the advantages and the detri- 
ments which we have identified. 

"Having done this, we con- 
clude that the merger situation 


merger to proceed are: 

• That within one month of 
acquiring a controlling interest 
In BCal, BA will return to the 
Civil Aviation Authority all 
BCal's route licences to fly on 
UK domestic routes. Including to 
the Channel Islands, together 
with BCal's licences to fly 
between Gatwick and such Euro- 
pean destinations as Paris, Bros* 


• At the same, BA will not 
oppose any application by 
another airline seeking to com- 
pete with it on any route where 
existing BA/BCal Sights are not 
constrained by foreign govern- 
ments under bilateral air agree- 
ments. 

That means that other airlines 
can apply for licences where 
"dual" or "multiple designation” 
is already available, which 
includes all UK domestic routes, 
all west European routes except 
Italy and possibly Portugal, all 
routes to the US and Canada and 
all routes to the United Arab 
Emirates, Qatar and Bahrain. 

The list will be extended as the 
UK Government succeeds in 
negotiating more liberal air 
agreements with other countries. 


• BA will merge the charter 
activities of British Airtours with 
the relatively small charter 
activities operated by BCal under 
the BCal name. Those activities 
will operate under the . BCal 
name. It expects that in the 
short term they will be substan- 
tially on the same scale as the 
present separate charter activi- 
ties. 

In the longer term, BA expects 
such activities to expand, mainly 
with long-haul charter flights, in 
line with market growth. 


BA would also like to merge 
ie activities of Cal Air with the 


• The merged airline will oper- 
ate as one carrier for the purpose 
of UK designation on interna- 
tional air routes. 

• BA will submit to a review by 
the CAA of all the routes cur- 


rently flown by BCal to see 
whether further British competi- 


very powerful market position; 
that it might present a threat to 
charter operators at Gatwick; 


sels and Nice, to which it already 
operates, and on those for which 
it has licences but does not fly - 
Athens, Copenhagen, Hamburg, 
Oslo, Rome, Stockholm and 
Stuttgart 

• Within the same month, BA 
will also withdraw the appeals 
outstanding by BCal against the 
grant of route licences to its 


and that it might withhold from 
competing airlines the mainte- 


competing airlines the mainte- 
nance, repairs and training facil- 
ities now provided to them by 
BCal. 

At the same time, it identified 
a number of possible benefits. 

The merger would strength 
BA's ability to compete with big 


rival, Air Europe, for services 
between Gatwick and such Euro- 


be tween Gatwick and such Euro- 
pean cities as Amsterdam, Brus- 


whether further British competi- 
tion on them Is desirable. 

The commission says; "If the 
CAA thinks that competition 
with the merged airline is desir- 
able, it will presumably grant a 
licence to a suitable competitor." 
On some routes, such as Paris 
and Brussels, Air Europe is 
already emerging as such a com- 
petitor because BCal's appeals 
against the award of licences to 
it are being withdrawn. 

• BA will surrender a minimum 


the activities of Cal Air with the 
charter activities but that w ill 
depend on who owns the half- 
share in Cal Air now belonging 
to Rank and on any action that 
may be taken under the Fair 

Trading AcL 

The commission believes that 
the possible effects of the merger 
on competition will be reduced 
very considerably by the propos- 
als. especially through the return 
to the CAA of slots at Gatwick. 

If none of the licences surren- 
dered to the CAA is re-issued to 
the merged airline, the number 
of slots at Gatwick released by 
BA/BCal will amount to 20,000 
of the 33,500 slots at Gatwick 
now used by BCal and Cal Air. In 
any event, BA will be surrender- 
ing 5,000 slots there. 

The commission says: "This 
will modify considerably the 
position of the merged airline at 
Gatwick and the possibility of its 
taking unfair advantage of its 


BRITISH AIRWAYS has 21 days 
to decide whether, and at what 


price, to renew its takeover bid 
for British Caledonian Group. 
There is little chance that BA 
will pull back from completing 
the takeover or the one-time 
"second force" In British civil 
aviation, but its new terms will 
be worth considerably less than 
the original offer launched in 
July. 

Even if BA had revived its 
share offer on unchanged terms, 
the world market crash would 
have reduced its value to 5153m, 
compared with 5237m four 
months ago. In volatile share 
markets and In the shadow of 
possible recession, BA is also 
unlikely to be able to get its 
shares underwritten on terms 
sufficient to offer a cash alterna- 
tive as attractive as the previous 
5220m. 


.MARKET SHARES (%) ON ROUTES FROM LONDON WHERE BCAL AND 
BA COMPETE* 

Market share • 

BCal BA Combined ('000 passengers) 


EUROPE 

Paris 

Amsterdam 

Frankfurt 

Brussels 

Geneva 

Jersey 


UNITED KINGDOM 

Edinburgh 

Glasgow 

Manchester 

Aberdeen* 

Ma ti Chester'- . 
Aberdeen 


Since the first bid was referred 
to the Monopolies and Mergers 
Commission, BCal has also sold - 
or is In the process of selling - all 
of its operations apart from the 
scheduled airline itself and the 
group’s half share in Cal Air, a 
charter carrier. 


NORTH AMERICA 
New York 
Los Angeles 


MIDDLE & FAR EAST 

Hong Kong 

Dubai 

Muscat 


12 

39 

51 

2,238 

13 

30 

43 

1^68 

12 

27 

39 

870 

18 

38 

56 

707 

15 

43 • 

58 

614 

30 

49 

79 

453 

12 

67 

79 

1,121 

13 

69 

82 

Xus 

18 

82 

100 

869 

1 - 

87 

88 

414 

7 

82 

89 

38 

7 

27 

34 

' ’ 1,929 

20 

29 

49 

539 

25 

29 

54 

462 

35 

37 

72 

92 

9 

22 

31 

109 


■V NMD ManS SI 1987. 4- Fran I 


Sounac tetfmrraaim 


By promising, moreover, to 
return to the Civil Aviation 
Authority BCal's licences on 
eight current routes and seven 
others on which BCal does not at 
present operate services, BA will 
-be able to argue that the airline 
has even fewer assets. BA will 
conveniently ignore the fact that 
it intends subsequently to apply 
for all eight routes, and to oper- 
ate them under temporary 
licences in the meantime. 


Several factors, however, con- 
tradict the conclusion that BCal, 
an unquoted company, is now 
the subject of a Dutch auction in 
which the only bidder Is free to 
revise its offer price down wa rds, 
almost at wifi: 


• BCal continues to be worth 
more to BA than to any competi- 
tor and worth more than its 


value as an independent con- 
cern, because takeover would 


cem, because takeover would 

g ve BA a dominant position at 
atwick comparable to the one it 
already enjoys at Heathrow. 

• International Leisure Group, 
owner of Air Europe and the 
most vocal champion of Britain's 
small independent airlines, 
would not yesterday exclude the 
possibility of launching a bid for 
BCal, once BA had revealed its 
hand. 

• Several foreign airlines are 


still believed to be waiting in the 
wings ready to discuss possible 
alternative rescues for BCaL 

Although publicity given to 
those potential partners Ties beat . 
interpreted as an effort to raise 
the spectre of foreign entry into 
a privileged position in the UK 
market, it has also been useful 
for Sir Adam Thomson, BCal’s 
chairman, as a way to send dis- 
creet messages to his betrothed 
that other suitors are outside the 

door - or across the water - if BA 
proposes too stingy a deal. 

Because of those factors, City 
analysts yesterday were expect- 
ing an offer in the region of 
5140m to 5150m, in effect 
reflecting no changes except the 
fall in the BA share price. The 
decline of % per cent since the 
day before the bid was launched 
is -almost identical to the slide in 
sterling terms in the Standard & 
Poor's index for US airlines. 


Commonwealth Holding. 

Both moves have been inter- 


preted as a sign of in 
cash-flow problems. Although 
Sir Adam said yesterday that- the 
BCal group would show a profit 
in 1986-87, compared with' a pre- 
tax loss, of 519.3m in the previ- 
ous year, it was not clear 
whether that would be achieved 
without the disposal profits. 

At October 31 1986, BCal's net 
assets, of less than 5100m, com- 
pared with net borrowing of 
5320m, excluding overseas cash 
about which the Monopolies 
Commission had doubts concern- 
ing its remittabillty. About 
BCal's capital gearing of 844 per 

cent, the commission offered the 
faint consolation that "although 
fit] is highly geared by conven- 
tional standards, the position has 
not worsened over the last five 
years." 

BCal's financial position never- 
theless reduces the likelihood 
that any non-UK airline would 
offer to take a 25 per cent stake 
{the maximum allowed without 
BCal losing its licences). Such a 
rescuer would have also to act as 
banker to the group; Few; of the 
suitor* would be willing to take 
such a considerable risk for such 
a limited reward. 


BCal sold. Us hotel operations 
to Aer Ungus, the Irish airline. 


just before the end of Its finan- 
cial year on. October 31, By the 
end of this week, it expects to 
agree on terms for the disposal 
of Aberdeen-based British Cale- 
donian Helicopters to Bristow 
Helicopters, part of British & 




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RimimmI TimesThursday November 1 2 1987 


UK NEWS 


Government to 
discuss private 
sector space role 


BY PETER MARSH 

A NEW form' of British apace 
agency, with the private sector 
having a significant equity stake, 
is one option- to - be discussed 
under a government review of its 
involvement in space activities. 

The review, which started yes- 
terday, comes in the wake of the 
rebuff Britain received this week 
when the other 12 nations of the 
European Space Agency (ESA) 
ignored its advice over postpon- 
ing a series of big, manned space 
projects, Including the French- 
inspired Hermes spacecraft, the 
Ariane 6 rocket and the Colum- 
bus manned orbiting laboratory. 

Britain regards those projects, 
which are expected to cost about 
57bn by the end of the' century, 
as too expensive and of only 
minimal commercial potential. 

The new consideration of 
Britain's rale in space will also 
include an inquest into how the 
UK failed so badly to read sig-. 
rials from other European coun- 
tries regarding their readiness to 
back ESA's manned space proj- 
ects, Hermes m particular. 

In spite of the argument by-Mr 
Kenneth Clarke, Trade and 
Industry Minister, that Hermes 
was unnecessary, the rest of the 
ESA nations, meeting in The 
Hague on Tuesday, supported 
France. They backed all three 
manned projects, with only 
Britain staying on the sidelines. 

Mr Roy Gibson, former director 
general of the British National 
Space Centre (BNSC), said yes- 
terday the meeting was disas- 
trous for Britain. 

He said the object for Britain 
should have been to delay' the 
manned space programmes to 
allow more time to diacuas their 
technical basis and cost esti- 
mates rather than to see them 
charge ahead without UK partic- 
ipation. 

Mr Gibson said he thought Mr 


Clarke had been wrong to pro- 
claim so vehemently a month 
ago that he thought the ESA pro- 
were misdirected and 
Britain would be freezing Its 
subscription to the agency. 

Such a strong statement, 
which allowed little possibility 
of compromise* ‘doomed Britain 
from the start I don't think we 
used our political influence intel- 
ligently,* Mr Gibson said. 

It is believed that Mr Clarice 
greatly overestimated the sup- 
port for the UK view from the 
other countries 4n ■’ESA. At the 
meeting in The Hague, West Ger- 
many and Italy, supported by 
some of the smaller European 
-countries, backed the French 
line on Hennes .-’unexpectedly 

firmly, 

UK officials had warned Mr 
Clarke that a softer approach on 
Hermes, supporting some of the 
rationale behind it but hinting 
that the costs and technical basis 
required rethinking, might pro- 
duce a more positive result. 

One observer said: ‘In the end 
the harassment tactics backfired 
and drove the other countries 
closer together.” 

In spite of - the failure, Mr 
Clarke appears determined to 
continue his . drive to gain a 
greater involvement by compa- 
nies in funding UK space activi- 
ties. • 

He wants to consider ways of 
injecting private money into the 
UK’s annual civilian space bud- 
get of roughly SI 10 m a year. 
That sura i$ spent through the 
BNSC, which was set up two 
years ago under the auspices of 
the Trade and Industry Depart- 
ment. 

Companies, not only from the 
aerospace sector but in other 
fields such as banking and 
finance, will be asked u they 
would be willing to put up cash. 


LSI Logic microchip 
plant opens in Kent 

BY DAVID THOMAS 

LSI LOGIC, a US semiconductor Mr Bob Blair, president of LSI 

Logic Europe, said .most clients 
would be in Europe but'he also 
expected sales, world wide. 

He said the company would 
spend £10m initially on equip- 
ment. That ■might quadruple in 
the next lour years. 

’ Much of the work .at first 
would be designing chips for di- 
tfhts. Production, would build' up 
through next year. 

The plant would employ 50 
workers and- probably double 
that by the end of next year. 

LSI Is in talks, started a year 
ago, with some four companies 
about their talcing a stake m the 
plant 

Mr Blair said LSI had for the' 
moment dropped plans to float 
shares In Its European subsidiary 
on the UK Unlisted Securities 
Market 


quarter of next year, make 
advanced microchips. 

STC, the UK electronics group, 
has a 10 per cent stake in the 
operation and Is. also leasing the 
plant to.LSL- - 

■ : Tbe plant r will make chij 
known as application . specific 


integrated circuits (Aaics), 
designed to meet needs of partic- 
ular clients and among the fast- 
est growing sector of the semi- 
conductor market 
It will concentrate initially on 
making BiCMOS products, which 
combine bipolar and CMOS tech- 
nologies an a single chip, mainly 
for the telecommunications and 
industrial markets. The plant 
may diversify into standard 
products iii 1989. 


Electronics jobs planned 


BY QAV1D THOMAS 

WELWYN Electronics Systems, 
which assembles electronic com- 
ponents, is planning to create 
350 jobs at Its plant in Blyth, 
Northumberland. 

Welwyn, part or Crystalate 
Holdings, the electronics group, 
is building an extension to the 
plant which will double its 
capacity. 

Some of the new employees 
will be working on a multi-mil- 
lion-pound contract, which Wel- 
wyn won against competition 
from Far Eastern and Continen- 
tal manufacturers, to assemble 
electronic sewing machines. 


Mr Albert King, Welwyn man- 
aging director, refused to put a 
value on the order or to say how 
many of the new workers will be 
employed on the contract. 

The rest of the expansion will 
be carried out if Welwyn wins 
deals to assemble automobile 
electronics and consumer elec- 
tronic equipment. Those are due 
to be decided in the next few 
months. 

The Blyth factory has 
increased its workforce from 225 
to 420 In the two years it has 
been open. 


Sir John to 
give up top 
control at 
Sainsbtiry 

By Christopher Parices, 

Consumer Industries Edttor 

SIS JOHN SAINSBURX la to 
give up moat of Ms opera-' 
tlonal responsibilities as 
chairman and chief execu- 
tive of the J. Salnabnry 
retailing group early in the 
new year. 

His withdrawal from 
day-to-day operations was- 
signalled yesterday when 
the company announced a 
boardroom shuffle In which' 
top executive control will 
shift to Mr Joe Barnes, 
assistant managing direc- 
tor, retail, and Mr David 
Qnarmby, distribution 
director. 

They are to be appointed 
joint managing directors in 
succession to Sir Roy Grif- 
fiths, who retires at the 
annu a l meeting next June. 
He will remain on the board 
as non-executive deputy 
chai rman 

Sir Roy's role as executive 
deputy chairman will be fil- 
led by Mr David S&insbmy, 
the finance director. 

Mr Barnes, who is daw to 
retire in 1990, takes up his 
appointment on Januaxy 1. 
He will have specific 
responsibility for retail 
operations, buying and mar- 
keting, the company said, 
“relieving Sir John ... of 
the operational role he 
plays in this area." 

Mr Qnarmby, 46, takes up 
his pent on June 29, when 
Sir Roy retires. . 

Sir John, who has led the 
group since 1969, would be 
free to devote more rime to 
board matters and group 
subsidiaries, the company 
said. 

The promotions were well 
received In the City. Hr 
Barnes, an accountant who 
joined the company in 1956, 
was described as “pleasant 
and businesslike with the 
core of steel one is looking 
for.* 

Mr Qnarmby, a former 
managing director of Lon- 
don Transport, was a key 
figure in Salnsbuxy's recent 
takeover of 'Shaw's, a US 

supermarket chain. 


Call to reform 
export credit 
guarantees 

By Peter ilo uta fl u o n 

THE EXPORT Credits Guar- 
antee Department' should 
formally Introduce a new 
premium, structure that 
reflects the risks it takes In 
providing support for 
Britain's- exports, the Com- 
mons public accounts com- 
mittee said yesterday. 

In Its latest report on the 
BCGD, the committee also 
said the department s hould 
consider unilateral intro- 
duction of Improved docu- 
mentation and procedures 
for the short-term bank 
guarantees used to baric, up 
export credits that remain 
on its books in spite of the 
withdrawal of loss-making 
short-term guarantee fhdl- 

'e€GD said yesterday it 
was studying the report, 
which was drawn up after 
commi ttee hearings in the 
summer. However, the. feel- 
ing within the organisation 
is that it is already moving 
to meet tiie criticisms. 

Its premium structure has 
already become more flexi- 
ble and negotiations with . 
banks over the reform of 
medium-term export 
finance are complete, 
although the committee has 
of delays. 


notice of redemption 

Kaiser Aluminum. & Chemical International Company 

5% Subordinated Guaranteed Sinking Fund Debentures Due 1988 

NOTICE IS HEREBY GIVEN that, pursuant to the provisions of Section 5.01 of the Indenture 
dated at of February L 1968. as supriemraied, and the Debenture* ^ •toggle*^ tawe, 
all of the Debentures have been called for redemption on December 14, 1987 at 100% of Out 

I ^ 1 ^kb 3? the Debentures designated above will bec^^iajmdgy^ri^the 


Guarani? Trust Companv of New York in Brussels. FranJmirt am Main, London and ram. ueoito 
Rotnagtwlo S.p.A. in Milan. Benque Internationale! Luxembourg In Luxembourg and Bank Mees 
& Hope N.V. in Amsterdam, (the “Paying Agents"). ' ■ . , , 

Pavmenta at the office of any Paying-Agent outside of the' United States trill be made by check 
djann on. or transfer to a United States dollar account with, a bank in Tbs-Qtv of New York. 
Anv pavment made bv transfer to an account maintained by the pay =« with a bank in the i United 
State* mav be subject to reporting ro the United States Internal Revenue Sendee f IBS} and to 
backup withholding at a rate of 2PU IT payees not recognized aa exempt recipients ail to provide 
the Paving Agent with an executed IRS Form W-8, cettifidng under penalties of perjury that the 
povee is not a United States person or an executed IRS Form W-9, certifying under penalties of 
peri u rv the payer's ux paver identification number (employer identification number or social 
Security number, as appropriate). Those holders who are required to provide their correct tax- 
payer identification number on IRS Form W-9 and who foil to do so may also be subject to a 
penalty of 850. Please therefore gravida the appropriate certification when presenting your se- 

^ Debentu ^surrendered for redemption should have attached all unmatured coupons appurte- 

*On andafter December 14, 1987, Interest shall cease to accrue on the Debentures. 

Subject to the provisions of tbe Indenture, on or prior to the dose ofbusfness on the redemption 
dale, the Debentures selected for redemption may be surrendered at tbe offices of any of the 
PavlDC Agents for conversion into shares of Common Stock of either Kaiser Aluminum & 
Chemical Corporation or KalserTech Limited at the current conversion price of #24.62 per share. 
All such Debentures surrendered for conversion should have attached thereto all unmatured 
interest coupons and should be accompanied by an appropriate notice to effect conversion. No 
fractional shares will be Issued upon conversion, and no payment or adjustment will be made for 
interest accrued on such Debentures noir an account of any cash dividends On tbe Common 
Sock Issued- All of tbe Common Stock of Kaiser Aluminum A Chemical Corporation is owned 
tn KalserTech Limited and b. not pubHcly traded. The closing price of the Common Stock ot 
KairerTech Limited on October 28, 1987. as reported In the ComposOe Tkpe for the New York 
Sfcaffc Exchange— Listed Stocks, was 58425 per share. 


Dated: November 12. 1987 


KAISER ALUMINIUM EUROPE INCORPORATED 

(formerly Kaiser Aluminum & Qmmkal International Company) 


Kenneth Gooding looks at a Soviet hatchback designed to win Western buyers 

Samara heralds changes for Lada car range 


A NEW ERA Is bet 
Satra Motors, which has 
Importing Russian-built Lada 
cars into the UK for 20 years. 
Satra in today launching the 
Samara, toe Soviet factory's first 
front- wheel -drive hatchback 
model, and expects Its total sales 
aa a result to. jump by 20 per 
cent next year to -30,000 vehicles. 

At the same time, ownership 
of Satra is moving to Western 
Motor Holdings, a quoted com- 
pany with a range of car-related 
interests, in a deal worth nearly 

£21 m. 

Western is buying Satra from 
the family interests of Mr Ara 
Oztemel, 62, an Armenian Amer- 
ican, who now has 234 per cent 
of the UK company and who will 
probably be Invited to become 
Western’s chairman. 

The Samara takes Satra Into a 
new sector of the car market, but 
the company will still concen- 
trate on offering low prices as its 
main selling point. Three ver- 
sions of the l.SOOcc, three-door 
hatchback are available at 
£4,295. £4,795 and £5,295 com- 



Lada'a hww 1300 hatchback b e i n g. launc he d today 


with £5,662 for the boric holder. 
p ord Escort. Last year, 20,312 Lada care 

Mr Martin Austin, managing were registered in the UK to give 
director of Satra, says: “With the Satra a market share of just over 
Samara we are offering an 1 per cent, up from 15,314 and 
Escort-sized car at a Fiesta tXM per cent in 1985, This year 
price.’ ‘the company is on target to 

He suggests that introduction reach 26,000 registrations, well 
of the Samara will enable Lada ahead of the previous record of 
to trice the title of fastest-grow- 22,270 set in 1979. 
ing new car franchise in the UK Mr Austin admits that in the 
away from Citroen, the current past Lada has not been able to 


move upmarket and out of its 
niche among the lowest-priced 
cars available in the UK. But he 
insists that his company is tak- 
ing a very conservative view of 
the prospects for toe Samara by 
predicting 10,000 sales next year, 
or which half will substitute for 
other Lada models. 

Satra hopes the Samara will 
appeal to younger customers and 
particularly help it to gain sales 
in the south of England, perhaps 
as a second family car. At the 
moment, about two thirds of 
Lada car sales are made north of 
Birmingham. 

Satra last year made a pre-tax 
profit of £3. Ira on a turnover of 
555.5m. Mr Austin points out 
that the turnover is generated by 
only 180 employees. Satra is "a 
solid, expanding and stable busi- 
ness’, he maintains. 

The switch of ownership to a 
public company that could issue 
shares to finance expansion 
should enable Satra to expand 
faster than in the past, he sug- 


Mr Austin claims that the Lada 


dealer network is the second 
most profitable in the UK (after 
Honda's). Satra wants to increase 
the number of dealers from the 
current 210 to more than 220 
next year. 

Satra has allocated nearly £lm 
to promote the Samara in the 
next three months, but will wait 
until the new year to spend most 
of this money. 

The Samara was first launched 
in the West in Brussels in Janu- 
ary last year. The Russians usu- 
ally take some time to engineer 
Lada cars Tor right-hand drive, 
even though the UK vies with 
France to sell the most Lada cars 
and is the market from which 
the factory earns the most hard 
currency. 

Mr Austin says the Samara 
range will be expanded with 
other engine sizes and body 
shapes. A l,500cc version will be 
launched in the UK In about a 
year, and possibly an l,100cc 
unit. Four-door models and 
estates will replace the Riva 
model (based on the now 
defunct rat 124) in the 1990s. 


Albion £9m project complete 


BY JAMES BUXTON, SCOTTISH CORRESPONDENT 


LEYLAND DAF, the Anglo-Dutch 
truck maker formed this year 
when Rover merged its trucks - 
business with Daf of the Nether- 
lands, yesterday announced com- 
pletion of a two-year investment 
programme at its Albion axle 
giant in Glasgow which has cost 

However, Mr George Simpson, 
Leyland Daf chief executive, said 
creation of what he called one of 
the most efficient axle-making 
-operations in Europe did hot 
amount to a guarantee of secu- 
rity for the plant's future. 

He said it did not imply "we 
are satisfied with the outstand- 
ing progress to date on quality 
and productivity, and certainly 
does not provide a shelter for 


Albion against the longer-term 
of the truck market.” 
lowever, it did mean Albion 
was "more competitively .fit to 
meet the challenges of the 
marketplace than ever before.” 

Leyland Daf has made clear 
that the future of its UK 
operations depends on increasing 
output from them. 

Mr Simpson said output at the 
Leyland assembly plant would 
be 11,000 trucks, compared with 
8,000 last year. Production was 
running at an annual rate of 
14,000. 

Daf has a plant in Belgium 
making' axles to a different speci- 
fication. 

Industry analysts have ques- 
tioned whether UK plants win 


have a leading role in 'supplying 
vehicles and components when a 
new generation of Leyland Daf 
trucks is introduced. 

Daf owns 60 per cent of Ley- 
land Daf; Rover 40 per cent. 

The £9m investment at the 
Glasgow plant has largely gone 
on new, computer- numerically 
controlled machine tools. 

- All manufacturing has been 
concentrated on one site. The 
plant, which formerly made 
Albion vehicles, has been cut 
from 75,000 sq metres to 44JXM) 
sq metres. 

The workforce is shortly to fall 
from about 900 to 760, as an 
agreed redundancy and 
tirement pragamme takes 


Ford aims to recapture 
lead in pick-up vehicles 


BY JOHN GBWFTTHS 

FORD alms to recapture leader- 
ship of the UK market for light 
pick-up vehicles with a Sierra- 
based P100 model assembled in 
Portugal and to be unveiled 
today at the Scottish motor 
show. 

Some 5,000 units are scheduled 
to be built in the first year, all 
destined for the UK, rising to 
between 10,000 and 12,000 a year 
when left-hand-drive and diesel 
models are added in about 12 
months. 

About 60 per cent of the value 
of the vehicles is made up of 
shipments from the UK. The 
body and some of the running 
gear, with the exception of the 


rear cabin panel and load-carry- 
ing box section, are produced at 
Dagenham, east London. How- 
ever, the two-litre petrol engine 
and transmission are sourced 
from West Germany. 

Ford said yesterday that the 
value of UK-sourced content 
would rise to 80 per cent when 
Dagenham -built diesels are 
added to the range next year. 

The company originally 
intended to produce the entire 
vehicle on its Sierra assembly 
lines at Dagenham. However, the 

§ lck-up model is longer than the 
lerra estate and would have 
required assembly-line changes. 


ADVERTISEMENT 



Shell to remain a major 
force in South African 
business 


John Wilson, ExecutiveChairman of SHELL SOUTH AFRICA (Pty)UcL 
talks to John Spira, Finance Editor of the Johannesburg Sunday Star. 



Spireu What b the extent oTShdFs activi- 
ties in South Africa? 

Wilson: Shell is more than just an oil com- 
pany in South Africa. It is a resources com- 
pany with fairly wide interests, ranging from 
our traditional oil business to cool, metals, 
chemicals and, most recently, forestry. We 
also have a portfolio of small businesses. 

Forestry is probably the activity rhai cap- 
tures the imagination. The Shell group is in- 
volved in forestry throughout the world, with 
forests in Brazil. Chile, New Zealand and 
Thailand. In South Africa, Shell has been in 
this business for just under two years and in 
fofo short period we’to moved touoids the esr' 
tablishmemofaclona(bankasa step towards 
increasing the productivity of the forest. We 
believe through the application of Shell know- 
how and techniques we shall increase the 
wood production of ow forest tiy a factor of 
at least four-and -a- half times over their 
present levels. 

Our portfolio of small businesses is relat- 
ed toour mainstream activities. Price's Can- 
dles makes domestic and decorative candles 
(thecompany is the leader in its field in South 
Africa). Cadac produces LPG appliances, we 
have a company, a specialist com- 

pany dealing in liquid petroleum gas and then 
we have a 50 % stake in a bimmastic road pav- 
ing company. 

Shell in South Africa is a company with a 

turnover erf 1 around R3 trillion a year and as- 


R1 billion. Vife are the market leader in total 
sales of petroleum products and have been for 

a number of years. 

Spin: How does Shell South Africa 
figure in relation toother Sooth African gi- 
ants and to Shell'S activities worldwide? 
Wilson: In many countries Shell ranks 


applies here. 6n the basis ofturnowr. there 
aren't many companies in South Africa that 
generate sales as largeas ours. Shell operates 
in about MS countries and we in South Afri- 
ca would be in the top 20 in terms of size. 

Spira: What is ShelTs attitude toward 

sanctions and tfirinvestinent? 

WQsoq: Shell SA has operated in South 
Africa forumiard of 75 years. W? are— and 
have always been — a profitable company and 
we've been totally self-financing. When you 

look at tbe composition of our staff, we are 
essentially a South African company, even 
though we have an international shareholder. 
Virtually BO* of our employees, including 
myself, are South Africans. 

We employ directly 6 000 people, which 
figure rises to B000 if you take iwo account 

nirr chtipH nlitiiw m uanraic tfvtmrw mi ftS- And 


Shell— or any large company for that matter 
— can’t pick up its assets and take them auay. 
Those assets would pass into South Africa), 
bands at bargain basement prices and busi- 
ness would continue as usual. 

No* as a multinational, we do think some- 
what differently to the ordinary nin-of-the-’ 
mill South African comparer. We have mini- 
mum wages— the EEC code wage— and it 
is only now that trade union negotiations are 
taking wages up to and beyond foe EEC mini- 
mum levels. The EEC levels are determined 
InSoudiAfricabytheUniversttyofSAfUm- 
sa). Wtbeheve that this has done alt* in terms 
of upliftment of wages and salaries through- 
out the black community. 

Bear m mind, too, tbat we, along with most 
other multinationals, are convinced that so- 
cial responsibility ispart of our business com- 
mitmera — part of our contract with society. 
Ws pay a lot of attention id this. Ihonesdy don't 
see the same stress being placed on social 
responsibility by South' African companies. 
If we had to drsinvest there would be a. 
watering-down of the activities. 

1 also believe that by being part of tbe South 
African system we can continue to exert an in- 
fluence on society by trying to change atti- 
tudes and perceptions withm our own com- 
pany and within the environment in which we 
operate. Sol genuinely feel that wearea posi- 
tive force for change. 

It doesn't really matter how big orsmril that 
force is — as long as we are a force. If we 
weren't here, we'd be no part of the country 's 
evolution. 

We see ourselves in business in perpetui- 
ty Once we pull out of the South African mar- 
ket we could never get back again. Vifewoufcf 
like to think that we have been apart of South 
Africa, we are a part of South Africa and that 
we shall be a pan of South Africa in the future. 

Spira: There has nevertheless been intense 
pressure abroad for SheH to dfanwst from 
South Africa. How have these pressures 
been resisted? 

Wiboa: W: have an active boycott against us 

in 11 countries at present and I'm pleased to 
sqy that although tnere'sa lot ofhassles for die 
group's directors, the impact on the bottom 
line just hasn't been there. We remain profita- 
ble in all those countries. 

* While there has bear pressure on Shell to 
disiiwesi, it is a feet that, certainly since the 
late 1960s. we have emphasized that we are 
a non-racial company striving to eliminate 
apartheid. Our shareholder has never pres- 
surised Shell SA to door say what it has done. 
It comes from within the company: from its 
own management team; and mm the i 
majority of its staff. W: subscribe to the I 


JOHN WILSON 

South Africa is concerned? 

WBsoo: No-one is happy with the pressures 
that fiow from being associated with South 
Africa. ButTmthriUed® say that Royal Dutch 
Shell gives us enormous support and that it 
is prepared io put up with the hassle factor be- 
cause k recognises foe advanogestothe group 
of remaining in South Africa. It recognises 
curability loraercise influence in this socie- 
ty and it recognises the group's responsibili- 
ty k> tbe staff. 

In short, there's conskferibfededication on 
the pan of Royal Dutch Shell to remain in 
South Africa. 

Having said that, one must appreciate that 
no-one can state with ttxal certainty that Shd I 
will never pull out of South Africa. But it 
would take some major, traumatic event for 
• this to materialise. 

Spira: Is tire natore of yonr social respon- 
sibility programme used as a stick to beat 
off disinvestment pressures? 

Wilson: Shell has never looked at its social 
responsibility programme from an advertis- 
ing point of view. Much of what wedo is never 
publicised. Indeed, in many cases publicity 
would be counter-productive. 

For example, when we first launched our 
educational programmes, we were breaking 
new ground, we have a post-matriculation 
scheme that's been operating since 1980. A 
lot Of water has flown under the bridge since 
then and a kx of things accepted today were 
not accepted in 1980, when we had many 
young blacks living in residences alongside 
young whies students. Obviously wc worked 
hard to keep k out of the press. Publkny would 
have killed the scheme. 

Today, of course, it's accepted. We haw a 
lot of projects which run along non-racial 
lines. wfe try to develop projects and get in- 
volved in areasthstt the people (black or white) 
want themselves. We try to work with 
communities. 

Spira: Where does toe accent of your so- 
cial responsibffity programme fie? 

Wilson: Our essential areas of interest are 
education. One is a scheme for upgrading the 
level ofblack matriculants to give them a bet- 
ter chance at unhwshy. At this stage, w: have 
72 young blacks with omsanding potential at 
varying stages of thtirdegree programmes at 
Cape Town University. 

Another isalairiy large effort based in Natal 
cal led foe Shell Maths and Science Resource 
Centre. It's aimed at upgrading teachers. The 


activities are controlled by a trust with SheH 
being the sole donor® the trust, although we 
would be quite happy for other donors® join 
us and® drop our name farm die prog ram me. 
The costs are largely manpower costs and the 
budget is in the region ofR2 ^5 million a year. . 

Wne also interested in small business de- 
velopment and we have a number of activj- 
tks m that area. _ 

generally look forprojects wluch have 
a multiplier effect. We avoid projects that don’t 
have a snowballing effect in the community. 

Spira: One would presume that these 
programmes are not totafly altruistic? 

WBtomTnie. Our poa-manfo scheme is not 
all altruistic. We see a need for developing a 
pool of black skills. If we as a company are 
m develop our full economic potential, we've 
got ® develop our manpower resources. The 
small white pool afiuunan resources in South 
Africa is totally inadequate. We recognised 
this some years ago, so we've been trying » 
make a contribution ® increasing the skills 
pool. 

The peoples* sponsor at the universities 
are not tied to us. We don't believe in placing 
obligations on young people. If they don t 
want ® work for Shell after several years of 
dose contact, we don't really want them. But 
this rarefy happens and we hope, over a nine 
year period, ® have some 150 graduates from 
this programme working in the company. 

Spira: Does Shell have specific targets for 
the black component ot its workforce? 

WSson: We believe that an affirmative action 
programme is necessary. One has ® recog- 
nise that not all sectors of die community in 
South Africa have had an equal ride through 
the course of their lives. Therefore, an affir- 
mative action programme is necessary. 

Bra haring said that, we firmly believe that 
a man must justify h is position . It is vital that 
the dignity of the 'mdividua} be considered in 
affirmative action programme- He must 
prove himsdfby fitting into the work environ- 
ment and doing the job that is required of any- 
one in that position— be he white or black. 
This approach has been highly successful thus 
far. 

One (dthetragedfes of today's South Afri- 
can business scene is that there are so many 


the net resuliof which is that there's a scarci- 
ty value. 

We recently looked at employing a black 
chartered accountant but the scarcity value he 
placed on himsel f was some R40000ouerand 
above tbe equivalent white. We've not pre- 
pared logo along with this sort of thing, be- 
cause the last thing we want » be guilty of is 
tokenism. 

Wfve established tarots, by job groups, for 
the numbers of senior black employees that 
we wish ® have on our staff and we're look- 
ing at ways and means of achieving those tar- 
gets. In the senior management group, we 
uould see 20* of these positions being oc- 
cupied by blacks within the next five ® six 
years. It*saaffmouniain®cUmbbutweaim 
to get there. 

Spira: Hmr do yon see the frame of SIkH 
in Sooth Africa? 

Wilson: G rowing in all the business areas in 

which we are currently involved and remain- 
ing a dominant force m the market place and 
in South African society. 


figure rises to WOOO if jou take m® account mess principles of the Royal Dutch Shell 
oursharduldmainvanous companies. And group and when we look at those principles 
yOa’re probably looking at 50 000 people be- against the way we've pe r fo r med in business, 
rogdependem on us in terms of extended ra- Ipelieve that whw we're doing is the right 
muy units, thing. Vlfe are not merely reactmero interna- 


idependent onus in terms of extw 
ly units, 

% therefore fed we haw an obligation to 
our stiff » resist disinvestment pressures. 

Wl»t people forget when foey call for dis- 

inuesunent k thar a company of the size of 


med in business. 
I believe that'whn we're doing is the right 
thing. Wfearenoctnerely reacting® intenia- 
tional pressures. 

Spira: Is Royal tWdi Sbdl happy to retain 
the status quo as &r as Its investment in 



SHELL SOUTH AFRICA (PTY) LTD. 

Head Office: Shell House, 9 RiebeckSL Cape Ibwn 
or RQ Sox 2231, Cape Town 8000 
TeL No: Cape Town 21-3111 


i . 







SAATOU&SAAKig 


12 


Ministers 
looking at 
secrets act 
revision 

BY Michael Cassefl, PoWcal 
Correspondent 

GOVERNMENT sources yes- 
.terday confirmed that min- 
isters are considering possi- 
ble changes to the widely 
criticised Official Secrets 
Act, although they stressed 
the Government's belief 
that the exercise Is fraught 
with difficulties and that no 
early attempt to implement 

new legislation is proposed. 

A private member's bill 
aimed at reforming the 
wide-ranging Section 2 is 
due to be presented to the 
Commons In January by Mr 
Richard Shepherd, the Tory 
MP for Aldridge-Brownhills, 
and although the Govern- 
ment does not Intend to try 
to use the opportunity to 
bring forward legislation, 
an outline of its own pro- 
posals could be known by 
then. 

Whitehall denied that the 
rethink has been triggered 
by the recent Spycatcher 
case bnt acknowledged that 
there fas now general dissat- 
isfaction with the act and in 
particular with the catch-all 
Section 2, which is widely 
regarded as having been 
discredited and in need of 
reform. 

The first Indication of the 
review was contained in a 
written parliamentary 
answer earlier this week 
after Sir Patrick Mayhew, 
the Attorney General, said 
that work was In hand on 
devising provisions for an 
"effective, enforceable and 
reasonable alternative" to 
odating le gislatio n. 

The freefe look at the 
existing legislation is the 
first since the Government 
abandoned the 1979 Protec- 
tion of OfOUal Information 
BUI, since when Mrs 
Thatcher has repeatedly 
rejected suggestions for 
further attempts at chang- 
ing the law. 

Mr Shepherd's bill Is 
designed to repeal Section 2 
and replace It with mea- 
sures to protect informa- 
tion in six key areas. He 
welcomed the move yester- 
day. 


PARLIAMENT and POLITICS 


House hit by procedural warfare 


BY IVOR OWEN 

IN ROWDY exchanges during the 
course of an all-night sitting of 
the Commons, Labour MPs 
countered Conservative charges 


Cabinet had to be scram 
with accusations of corrupt! 

A private bill seeking author- 
ity to expand Felixstowe har- 
bour was the battleground for a 
prolonged bout of procedural 
warfare. Labour tactics to delay 
its progress were exploited by 
Conservative MPs to prolong 
Tuesday's sitting beyond 2.30 
yesterday afternoon and to strike 
all business due to have been 
discussed yesterday from the 
Commons calendar. 

With the apparent approval of 

the Labour whips - but not of all 
Scottish Labour MPs - the oppo- 
nents of the bill also decided to 
sacrifice nearly 60 minutes of 
Scottish questions which would 
have provided another opportu- 
nity to highlight the fact that 
the Conservatives can now only 
muster 10 of Scotland's 72 MPs. 


Mr Nicholas Fairbairn (C, 
Perth and Kinross) taunted 
Labour MPs over their disarray 
by claiming that they were wag- 
ing war against each other. 

Amid laughter from the gov- 
ernment benches Mr Fairbairn 
suggested that if new legislation 
on firearms was required it 
should contain a provision to 
“stop the Labour Party shooting 
its wot off.' 

Mr Harry Ewing (Lab, Fal- 
kirk East) hit back with another 
reference to the hospitality 
which had been provided for 
MPs at various stages of the bill. 

He spoke of the “corruption 
that was going on last night in a 
blatant attempt to buy votes of 
members of the House. 

Mr Ewing also claimed that Sir 
Jeffrey Sterling, chairman of 
P&O, was an adviser to Lord 
Young of Graffham, the Trade 


?e of the bill that she had Mr Rogers to resume his seat and 
ed the goverment whips not threatened to suspend him, Mr 
to enter into any accommodation Heffer, who made several unsuc- 
with opposition leaders to ensure cessful attempts to raise a point 
that the debate ended before 2.30 of order, stormed from his seat 
yesterday afternoon. on the opposition bad: benches 

The frustration on the Labour to stand in the centre of the 
benches mounted as an attempt chamber by the mace to confront 
by Mr Donald Dewar, the the Speaker. 

shadow Scottish SccreUr^to ^ ^abusive exehangm 


between the two sides of the 
fafledi^ op^itionleadera dm- y ollge became increasingly 

KSU heated, the Speaker described!* 
manoeuvred m then efforts to Heffe J? s behaviour as ‘disgrace- 
secure a goverment statement on ordered him to retumto 


the merger of British A; 
and British Caledonian at 
customary time - 3.30 yesterday 
afternoon. 

In a desperate bid to salvage 
something from the wreckage, 
two Labour MPs, Mr Allan Rog- 
ers, a junior defence spokesman, 
and Mr Eric Heffer (Liverpool 
Walton), risked suspension by 
trying to force an interruption in 


his seat 

Having complied with the 
instruction, Mr Heffer 

that his sole pur- 
in oppor- 
tunity to suggest that with the 
House at 'a very high emotional 
level” the. sitting should be 
' for a brief period, 
e Speaker refused to sus- 



Financial Times Thursday November 1 2 1987 

Gould says aviation 
policy in ‘confusion’ 
after merger ruling 

BY TOM LYNCH 

THE GOVERNMENTS competi- 
tion and aviation policies were 
left in ‘confusion* following the 
go-ahead for the merger between 
British Airways and British Cale- 
donian, Mr Bryan Gould, the 
shadow Trade and Industry Sec- 
retary, told the Commons yester- 


Erie Heffer: risked suspension 
in forcing interruption. 


Something like normality 
' er hurried < 


^Othei^airom^ffitbenchers the'dobate’on the bill to secure a pend the sitting on the grounds 

government statement on the that such a step was only taken 
merger of British Airways and when “things get so out of order 
British Caledonian. that the business of the House 

After the Speaker had ordered could not proceed. 


asserted that Mrs Margaret 
Thatcher, the Prime Minister, 
had been so angered by Labour’s 
tactics in seeking to 


was 

restored when after hurried con- 
sultations between government 
and opposition whips Mr Bryan 
Gould, shadow Trade and Indus- 
try Secretary, succeeded in per- 
suading the Speaker to accept a 
motion to adjourn debate on the 
bill so as to permit a 90-minute 
discussion on the British Air- 
ways B-Cal merger. 


Liberal-SDP talks gather pace to meet deadline 


BY MICHAEL CASSELL, POLITICAL CORRESPONDENT 

THE PACE of merger talks the debate on security at West- 
be tween the Social Democratic minster, although progress was 
Party and the Liberals is being made on drawing up key ele- 
stepped up amid growing con- merits of the proposed party's 
cem on both sides about their constitution, 
ability to meet the year-end It is now hoped that the draft 
deadline for finalising a ballot constitution, which should be 


package. 

The latest round of joint dis- 
cussions on Tuesday night was 
repeatedly disrupted by a series 
of votes m the Common 


submitted this weekend for con- 
sideration next week by negotia- 
tors, will be published next 
month. The policy prospectus, 
ns during which the two leaders have not 


yet started to write, will emerge 
in early January. 

Mr David Steel, the Liberal 
leader, yesterday announced that 
the special Liberal assembly to 
decide whether to put the 
merger package to a ballot of 
members will be held on Janu- 
ary 23, one week before the the 
SDP's Council for Social Democ- 
racy meets in Sheffield to make 
its own decision. The Liberals 


are likely to meet in Harrogate. 

Mr Steel made clear his irrita- 
tion with the detailed nature of 
the constitutional discussions 
and said the two sides, which 
had set themselves a tight sched- 
ule, would now have to move 
more quickly. He said he 
remained optimistic about the 
outcome, even if the talks were 
“a tedious process.” 

. Mr Robert Madennan, the SDP 


Challenge by Hain to Labour’s soft left 


BY OUR POLITICAL CORRESPONDENT 

LABOUR'S soft left is in danger of running 
out of steam unless it quickly produces a 
positive, alternative political agenda, 
according to Mr Peter Hain, a founder 
member and former vice-chairman of the 
Labour Co-ordinating Committee, the left- 
wing pressure group. 

Mr Hain, writing in today's edition of 
the New Statesman, claims that the soft 
left has, since 1981, been the most creative 
force within the Labour Party, “breaking 
with posing leftism, supplying much of the 
impetus for modernisation, being prepared 
to question old shibboleths and think 


through new policies*. „ , 

He stresses that while the gravity of the 
party has moved to the left, the sent left is 
not strong enough to run the party on its 
own and has chosen to join forces with the 
centre in order to retain influence. But he 
claims that a strong, democratic left force, 
independent of the leadership, is still 
needed and that the Tribune- LCC axis has 
two broad choices. 


democratic left or it can look to the. cen- 
tre-right and *a pragmatic, modernised, 
elector&lisin,* the failure of which paved 
the way for Thatcherism. At present; he 


says, 

route. 


soft left has chosen the latter 


Mr Hain suggests it can either 
and embrace others on the left, ou 
own ranks, prepared to build a genuinely 




He calls for a reform of the party 
machinery to shift emphasis away from 
national-level policy-making and calls on 
the left to take the party's present policy 
review seriously and to fight to prevent it 
from becoming a vehicle for burying radi- 
cal policies. 


MILAN APRIL 


1 6 ,h - 2 5 


tfc 


GRANDE FIERA D 1 A P R I L E 


1992: L’EUROPA 

HA AN 

APPOINTMENT 
WITH T0D0 
EL MUND0. 

POUR ARRIVER 

AWNT 
TREFFEN 
SIE SICH BEI 
PR0GETT0 
EUR0PA. 









leader, revealed that, in addition 
to next week's scheduled joint 
neg otiatin g session, the two sides 
would meet all day next Wednes- 
day. He said they had been 
forced to recognise that the work 
on drafting a constitution was “a 
painstaking process' but he 
remained satisfied with the way 
talks were going. 

Mr Madennan stressed that he 
was. still cautiously optimistic 

Whitelaw 
pledge on 
Tory plans 
in Lords 

By John Hunt 

THE Government’s determi- 
nation to get its heavy leg- 
islative programme through 
the House of Lords was 
underlined yesterday by 
Viscount Whitelaw, Leader 
of the Lords; 

In a speech to the Com- 
mons Press Gallery he 
seemed to be. trying to dis- 
tance himself from his fore- 
cast last week that the Gov- 
ernment could face n major 
defeat in the Lords on Its 
Education BOOL 
Yesterday he was at pains 
to emphasise that the Gov- 
ernment would get the main 
Items In its general election 
manifesto.- reform of the 
school s ystem, the poll tax 
and housing legislation - 
through the Upper House. 

ffia theme wus also in con- 
trast to his fringe speech at 
the Tory Party conference 
In Blackpool when he 
warned of the dangers of 
overloading the Lords with 
too many bills. 

He recalled yesterday 
Ids views on that aeat- 
sion had "aroused some 
interest." But in Ms experi- 
ence the Lords had faith- 
fully done their duty in 
seeking to improve Mils. 

Sometimes peers had used 
their votes to ask the Gov- 
ernment to think again 
about some aspects of its 
legislation. "That, la their 
role. That Is what they axe 
there for." 

They had carried out that 
role with great determinor 
tioa and skill and had never 
sought to frustrate an 
Important government bill 
during his four years as 
Honse Leader. 

If opposition peers did try 
to frustrate key items of 
legislation they would cer- 
tainly not succeed. 

The Government's pro- 
gramme of Important and 
radical measures laid down 
in Its election manifesto 
would be concluded and the 
bills concerned would 
become law. 

Lord Whitelaw, recalling 
his years an an MP, 
expressed concern that 
increased pressure of work 
on members of the Com- 
mons was prev en ti n g them 
£rom attending debates in 
the chamber. 

Letters which an MP 
received from constituents 
had now Increased to a 100 
or even 200 a week com- 
pared with 20 or 80 in the 
1960s. This had led to on 
explosion of correspon- 
dence between members 
and government deport- 
ments. Home Office minis- 
ters now hod to deal with 
letter* a year from 


The Home Office had to 
answer 4000 parliamentary 
questions annually com- 
pared with 600 in 1955. 

“All this extra work has 
members out of the 
chamber itself • the heart of 
parliament," he argued. 

"Fewer and fewer MPs lis- 
ten to debates. This has 

reduced the value of pacUor 
meutmry oratory." 

Their time was also token 
up as s result of intensive 
lobbying by interested 
organisations and individu- 
als on a scale never contem- 
plated a few years ago. 

Another casualty had 
been the weakening of con- 
tacts between MPs and min- 
isters and the press. The 
mutual trust on which the 
whole lobby system of brief- 
ing of journalists depended 
was not os strong os It was. 


iowever, most supporters of 
the Government welcomed the 
Monopolies and Mergers Com- 
mission report and ministers m 
both Houses insisted that they 
had no powers to intervene - 
even if they wanted to - since 
the commission had found that 
the merger would not operate 
against the public interest. 

Both Lord Young, the Trade 
and Industry Secretary, and Mr 
Francis Maude, a junior trade 
and industry minister, warned 
that the Government would 
insist on all the report's condi- 
tions being met, with a possible 
further reference to the commis- 
sion if the new airline failed to 
comply. 

The only voice of outright 
opposition to the merger came 
from the Liberal benches, where 
Mr Malcolm Bruce, the party's 
trade and industry spokesman, 
said the commission, had made 
the wrong decision. “The Gov- 
ernment's airline competition 
policy is now in total tatters.” 

Mr Gould said competition- was 
manifestly not now the sole 
determining factor in competi- 
tion policy. 'Competition has 
clearly been set aside in this 
instance.” The only way of pre- 
dicting how the Government 
would react to takeover issues 
was “to identify who and where 
are its political friends”. 

He accused the Government of 
abandoning its 1984 aviation 
white paper strategy of having a 
second-force airline. “The Gov- 
ernment's anxiety to' fatten up. 
BA in preparation for privatisa- 
tion destroyed that strategy by 
cutting the ground from under 
BCaL” 

The Government's failure to 
support BCal while it was con- 
centrating on privatising BA had 
l$ft BCal no longer viable: Since 
it would have been ”a disaster” 
to allow BCal -to fall into the 
hands of a foreign airline, the 
BA merger was necessary. 

Mr Gould was concerned that 
the interests of consumers had 
not been sufficiently addressed 
and was sceptical about the pro- 
vision that the new airline could, 
in theory, be awarded none of 
the routes to be reviewed - the 



Bryan Gould: competition “act 

aside in this instance 

logic of the merger, to create a 
“mega-carrier”, would - foil i£ all 
those routes went' to other opera- 
tors. 

Lord Young told peers he 
expected the new airline to 
"implement in full” the condi- 
tions suggested by BA and incor- 
porated in the MMC report. He 
said the chairman of the Civil 
Aviation Authority would report 
in a year on the outcome of the 
merger. 

If the new airline did not hon- 
our the conditions, it would be 
open to him to decide, in the 
-event of conflict with public pol- 
icy, to initiate a full reference to 
the Monopolies Commission 
which “takes a year or two and is 
a very considerable undertak- 
ing." 

He assured questioners that 
.there was ‘a real policy of com- 
petition in the airline industry. 
Competition is vital to the main- 
tenance of a good economy. I 
hope that the furtherance of this 
bid and the adoption of the con- 
ditions will ensure we have a 
competitive airline Industry.” ■ 

Mr Maude said the Monopolies 
Commission had reached “a prac- 
tical and sensible conclusion.” 
Competition would be "the prin- 
criterion but not the sole 


criterion" of references to the 
commission. 

Challenged by Mr Tony Blair, 
from the Labour front bench, on 
whether the concept of a sec- 
ond-force airline had been aban- 
doned, he said he could not pre- 
dict what would emerge from 
the reallocation, of routes. 


Increase in space agency 
spending ‘not justified’ 


BY TOM LYNCH 

BRITAIN refused to increase its 
S£5m contribution to the Euro- 
pean Space Agency to as much 
as S200m because “we were not 
persuaded that the proposal 
offered sufficient scientific, 
industrial or commercial return 
to justify these enormous sums,' 
Lord Young, the Trade and 
Industry Secretary, said y ester- 




ie told the House of Lords at 
Question Time that the British 
contribution to the ESA was 
"alreadysubstamtial”. 

The Earl of Kimberley (C) 
said British industry should have 


a say fit space policy and urged . 
the Government to ‘match every 
penny* industry spent on space. 
Another Conservative questioned 
whether the Government could 
afford to pull out, urging instead 
a reduction in. programmes. 

Lord Young agreed that British 
industry should have "a consid- 
erable say” in the space pro- 
gramme. TTrat is why we have 
resisted the enormous increases 
ESA has proposed.” 

The British economy was pros- 
pering because ”the Government 
is prudent with the taxpayers’ 
money it invests.” 


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4 


F&uuicijtf Times Thurscby November 12 1987 

UK NEWS 

r"V Japan’s London 


BUSINESS LAW 


*4 


\ banks focus 


» , oi 


BY DAVID LASCELLES, BANKING EDITOR 


■ace m: 
iustik 


SIGNIFICANT SHIFTS are 
; appearing in the strategies of 

Jk Japanese panics operating in the 

a* London-based International 

banking market® because of the 
changing environment. 

According to an article appear- 
ing In today's Bank of England 
Quarterly Bulletin and released 
in advance, the period of rapid 
growth in Japanese overseas 
banking assets may be canting to 
an end. 

Instead, banks are concentrat- 
ing more an profitability to meet 
the stricter capital requirements 
laid down by the Japanese 
authorities. Banks are also turn- 
ing more to the UK domestic 
market as a source of loan busi- 
ness. 

The bulletin says that Japa- 
nese banks have 38 per cent of 
their international assets booked 
in London, which they regard as 
a highly flexible and convenient 
market, of which they now hold 
the dominant market share. 

However, asset growth has 
begun to slow and an increasing 
part of their business is in yen 
rather than in other currencies. 
That reflects the growing inter- 
nationalisation of the yen and 
the rise of the Euro-yen market. 

Nevertheless, Japanese banks' 
lending to UK residents is still 
small, equivalent to 8 per cent of 
total UK lending and 3 per cent 


Equity revaluation lifts 
external assets by 48% 


BY 8UMON HOLBERTON 

THE UK recorded a 48 peer cent 
rise in net external assets to an 
estimated £ll4bn in 1986, 
according to the Bank of 
England's Quarterly Bulletin to 
be published today. 

A revaluation of portfolio 
Investment, because of the 
strong performance of world 
equity markets last year, 
accounted for more than &26bn 
of the rise, while net direct and 
portfolio investment transactions 
were mainly responsible for 
boosting external assets by 
almost fellbn. 


The Bank said the UK’s posi- 
tion during the first half of this 
year was largely unchanged, but 
the situation was clouded by uni- 
dentifiable flows in the balance 
of payments which could have 


The report, which compared 
the UK with other countries' in 
dollar terms, said a huge increase 
in debt against the US occurred 
during 1986. US external net Bar 
bilities rose from ill9bn in 1985 
to S275bn last year. 

Japan remained the world's 
biggest foreign investor and 
creditor with net external assets 
of S179bn. West Germany's net 
external assets were $114bn at 
the end of 1986, the Bank said. 

Recent sharp falls In world 
equity markets, with the 
strengthening of the pound, may 
lead, however, to some erosion or 
UK net assets abroad in the sec- 
ond half of this year. 

APPOINTMENTS 


Although the Bank did not 
comment on the current situa- 
tion in the bulletin, it did note 
that the UK had more than three' 
times as much invested abroad 
in ordinary shares as the over- 
seas sector had invested in UK 
equities. It concluded that, 
'other things being equal, a 
worldwide rise in stock prices 
will generate an increase in the 
- United Kingdom's net asset posi- 
tion.- 

Figures show that income gen- 
erated from the external transac- 
tions of UK banks and other 
leading financial institutions 
surged in 1986. Overall, income 
rose from &l-2bn In 1965 to £2bn 
last year, mainly to do with a 
strong growth in earnings f rom 
foreign currency, business. . _ 

The Bank ; 'emphasised ■ in the 
report that the figures it pror 
duced were the best estimates 
available on the basis of identir 
fled items. With a cumulative 
positive balancing item of about 
£27bn over the 10 years 1976-86, 
it was likely that published fig- 
ures overstated underlying net 
external asset stock. 

Abo, the Bank noted that -the 
statistical reporting system is 
known to capture very inade- 
quately many international 
financial transactions of compa- 
nies with counterparties other 
than banks; certain such transac- 
tions have probably been grow- 
ing in importance recently. 


Short Brothers new 
managing director 


SHORT BROTHERS, the Belfast 
aircraft and missiles company, 
announced yesterday that Mr 
Roy McNulty is to succeed Sir 
Philip Foreman as m a n aging 
director on his retirement next 
March, writes our Belfast corre- 
spondent. 

Mr McNulty, the current dep- 
uty managing director, joined 
Shorts in 1978 as executive direc- 
tor of finance administration and 
was appointed to. the main board 
in 1980. 

He was appointed deputy man- 
aging director in February last 
year, with responsibility for the 
Government-owned company's 
aircraft aerostructures 
operations, with the exception of 
engineering and quality control. 
He also has overall responsibility 
for the finance and commercial 
functions. 

A graduate of Trinity College, 
Dublin, Mr McNulty qualified as 
a chartered accountant in Scot- 
land before joning the interna- 
tional accountancy firm of Feat 
Marwick and Mitchell, 

Mr McNulty has also held 
senior management positions in 
Chrysler UK and the Belfast 
shipbuilder Hariand A Wolff e. 

Sir Philip will also be standing 
down as company chairman in 
March and the Government win 
be making an announcement 
about his successor in that post 
at a later date. 

. ★ 

GEORGE OLIVER {FOOTWEAR) 
has appointed Ur Graham Tay- 
lor as joint managing director. 
Mr Derek Winder, who holds 
the post, is retiring on December 
5. Mr Taylor was previously sales 
operations director. Mr Louis 
Oliver has been appointed dis- 
tribution director. Before his 
appointment to the boardhe was 

S oup merchandise co-ord in a t or. 

r Ray Barrows has been 
appointed Information services 
director. 

* 

BRUCE ENGINEERS. Bicester, 
has appointed Mr Mike Jones 
as technical director. He was 
quality manager. 


Sir Mite Low 

ing director of 


lot m a n ag - , 
■les Barker 


smith becomes chairman and 
chief executive. First Financial 
is part of the OSC A group. 

* , 

Mr Jan-WiHem van der Vcldea 
has been appointed executive 
vice president of S.G.WARBURG 
SODIT1C, Geneva, and has joined 
the board. He was a director of 
Morgan Grenfell & Co., in Lon- 
don. 

* 

Mr JJLfi. Kerf lng has retired 
as a director of CLOSE 
BROTHERS GROUP and Mr 
M.K.A. Keeling has succe e ded 
him as chairman. 

* 

THE CHARTERED INSTITUTE 
OF BUILDING has appointed Mr 
Keith Banbury as chief execu- 
tive. 

* 

Mr Graham Creswick has been 


director of Ronson. 

■* 

Mr D.W. Graves has been 
appointed a director of E.W. 
PAYNE (UJL). 


Mr Stephen Tate has been 
appointed marketing director of 
MECCA SOCIAL CLUBS. He was 
a senior consultant at Marketing 
Dynamics. 

* • 

Mr G.N. Isaac has been 
appointed a director, and Mr 
EJP. King an assi stant director 
of STERLING BROKERS, a mem- 
ber of the Mayflower Group. 
Miss HJL Catling, Mr D. Tray- 
ford and Hr P. King have 
beome managers. Mr* JL. Co*- 
wuy has been appointed secre- 
tary of Mayflower Group. 

Mr Jonathan Church has been 
appointed an assistan t dir ector 
Of CHARLES BARKER CITY. 


of sterling lending. Much of the 
Japanese Tending » concentrated 
in a few sectors: bonding societ- 
ies and securities dealers (many 
of the London-based Japanese 
houses)' and water supply and 
energy. 

The bulletin says Japanese 
bankers see the UK market as an 
area of potential growth now 
that sovereign lending and many 
sectors of the Euromarkets are 
stagnant. The financial sector 
and small and medium-sized 
companies are favourite targets. 
Several banks are opening 
regional branches to tap the 
market. Many have also estab- 
lished merchant banking i 
operations in the CUy. , 

Bat Japanese bankers say . the 
UK corporate market is not easy ! 
to break Into, because of the 
need for research. There are also 
cultural difficulties In engaging 
and promoting UK staff. 

The bulletin makes no men- 
tionaf the political controversies 
that have surrounded the growth 
of Japanese banking in London. 

It predicts, however, that Japa- 
nese banks are lik ely to remain 

the ^UR^^fbr ^th^for^^^ble 
future, btipyed by Japan's cur- 
rent-account surplus and. the 
banks' view of London as the 
best place in which to develop a 
global financial services capac- 
ity- . 


Two years ago the House of 
Lords reached what seemed to be 
ft thoroughly wayward decision 
about making ersatz spare puts 
for consumer durables.'” While 
the decision may at law have 
been eccentric, it offered a cun- 
ning solution to a complex com- 
mercial and legal problem. 

The government has now 
offered its much more straight- 
forward solution in the Copy- 
right, Designs and Patents Bill 
At first sight this seems to sup- 
plant the fabric of the Law 
Lords’ curious decision, but it 
may, on closer inspection, simply 
iron out the most obvious wrin- 
kle and leave the garment in a 
wearable condition. 

The Law Lords’ wrinkle pro- 
tects the designer of an ordinary 
functional thing, like an exhaust 
pipe or drive belt, from unwant- 
ed imitation for far longer than 
the main product of which the 
thing is but a short-lived compo- 
nent. They accorded functional 
designs full copyright protection, 
lasting for the lifetime of the 


Designer protection 


By Celia Hampton 


and in theory gives the maker of 
a composite product an extrava? 
gant monopoly power in the 
after-sales market 
This absurdity was tempered 
by stretching an ancient princi- 
ple of land law to cover the own- 
ership of any goods. Having 


given a thing with one hand, a 
person is not to take away the 
means of enjoying it with the 
other. If you sell me a car, you 
may not make it unreasonably 
difficult or costly for me to keep 
it in running order. I have a 
“right to repair”. 

Plainly there are difficulties in 
working this out. An enterpris- 
ing car owner who welds tin 


cons together in his workshop is 
no match for the manufacturer, 
but a bulk commercial copier in 
the open market is. Can a com- 
pany making copies plead in 
defence a single car owner's 
right Co repair, or all car owners’ 
rights to repair, or should it join 
a specimen car owner in the 
action to plead the right for him- 
self? 

The House of Lords 
approached the subject from a 
different angle - a most unusual 
one for English law but one 
which was unexpectedly consist- 
ent with the Europen Court's 
thinking on similar problems. 

The exclusive copyright exists 
and may be enforced, but it must- 
be exercised responsibly. Its 
exploitation fear purposes which 
were not intended had “gone far 
enough," said Lord Templeman. 
The law may not “confer on a 
manufacturer the right in effect 
to dictate the terms on which an 
article sold by him is to be kept 
in repair and working order.’ 

For the time being this solu- 
tion. Is odd, but satisfactory for 
consumers and the makers of 
ersatz parts. It is also apparently 
satisfactory to the EC - a pend- 
ing Commission action against 
the UK based on a complaint by 
Armstrong Patents was 
suspended after the House of 
Lords' decision. 

It would be quite wrong, on 
the other hand, to ignore the 
need of the designer for protec- 
tion. from predatory imitators 


who scoop the market before Jhe 
has made any return on his idea. 

The government's bill proposes 
an altogether more . logical 
regime to meet both the innova- 
tor's and the consumer’s needs. 
A new 'design right’ will protect 
original designs without any 
need for registration. _ It is 
intended for functional things. If 
the design is also a copyright 
work, it will not be an infringe- 
ment of the copyright to make 
an article to the design or to 
copy an article made to the 


What is most significant for 
spare parts is that it will not be 
an infringement of the design 
right to copy features whose 
shape is determined only by the 
need to conform to the connec- 
tions with, or the shape or 
appearance of, another article. A 
car manufacturer will not be 
able to stop the copying of the 
original exhaust pipe by insert- 
ing elaborate bends in the car’s 
chassis or by fixing it only with 
anti-clockwise screws. 

Even without the neaivinfinite 
of copyright proper, the length 
of exclusive rights Is of critical 
importance. The bill proposes a 
maximum of ten years from the 
first marketing of an article by 
the owner of the right, car with 
his consent, within an overall 
maximum of 15 years from the 
first recording or use of the 
design idea. 

During the last five years of 
the right's life, anyone is entitled 


to a licence from the owner to 
reproduce articles from the 
design. This will happen 
between five and ten years after 
the design's conception. If reap 
sonable terms (royalties, distri- 
bution, etc) cannot be agreed, 
the Comptroller of Patents will 
decide them. 

The EC is likely to give 
approval to five years’ outright 
protection for car parts in partic- 
ular. Ford Motors, having raced 
censure by the Monopolies and 
Mergers Commission and action 
by the EC Commission for the 
licence terms it imposed on inde- 
pendent panel makers, was 
allowed to refuse a licence in the 
first seven years after marketing 
the vehicle for which the panel 
was designed. 

This seven-year period Is 
reflected in the EC Commission's 
proposed exemption from com- 
petition law of agreements 
licensing the use of know-how - 
a species of Intellectual property 
which has features in common 
with design rights. 

In the UK the responsible min- 
ister will be able to issue orders 
cancelling or changing condi- 
tions in design right licences, or 
providing that licences should be 
granted to applicants. This 


whose own impotence to make 
orders was demonstrated in the 
Ford case. 


The length of protection is pre- 
dictable for spare parts, since 
popular demand for an item will 
normally only start with the 
marketing of the product of 
which it is a component. Never- 
theless five years is a longer time 
for some goods than for others. 
Car parts tend to be heavier-duty 
than, say, light fittings or tool 
parts. The main product could 
still be obsolescent before its 
parts are out of protection. 

A time lag also furnishes 
opportunities for freezing out the 
competition. Failure to market a 
design at all could stop a compet- 
itor from doing it himself for ten 
years. Changing the design to 
produce a new design could start 
a new peiod of protection run- 
ning 

There is scope for a flexible 
remedy to stop abuses. The con- 
sumer's right to repair may have 
some life left in iL The right was 
not a statutory creation, but was 
“uncovered” by the judges as 
part of the underlying common 
law, albeit in the spirit of inven- 
tion and with no support what- 
ever from Lord Griffiths. 

The Law Lords' judgments 
place no time limit, otherwise 
than by what is reasonable, on 
the use of the right to repair. 
The language in which the new 
design right Is flamed is analo- 
gous to the terms of the copy- 
right which they were intent on 
recognising. Since they 
expressed the “right" to repair as 


a restriction on the exercise or 
the copyright, rather- than as a 
right exercisable only in the 
hands of a disappointed con- 
sumer, it Is clearly intended to 
be of general application. As an 
argument in private litigation, 
the device could yet get the judi- 
cial clarification it certainly 
needs to become fully intelligi- 
ble. 

Although the introduction to 
the bill says simply that it repro- 
duces the government's propos- 
als in the white paper on innova- 
tion (Cmnd 9712), tney have 
been very significantly moder- 
ated by excluding those spare 
parts and bits of spare parts 
which are designed only to make 
them fit into the Larger product. 
In September, Michael J. Reyn- 
olds, Brussels- based partner in 
Allen A Overy, considered it 
most likely that the white 
paper's original proposals - five 
years* outright protection for all 
designs, including spare parts - 
would conflict with one or more 
principles of EC law." 

After several searches through 
the voluminous bill, the right to 
repair appears (to me, at least) to 
remain intact. As common law, 
it can survive unaided and bide 
its time until it is needed, maybe 
to help the mass users of dispos- 
able space-craft Liners. 

’ BL v Armstrong Patents 
(1986) 1 AER 530. 

** Copyright and Motor Car 
Spare Paris: UK and EEC 
Aspects, 8th Conference on 
Business Law, International 
Bar AssocitUion Section on 
Business Law. 

The author is deputy editor of 
the FT Business Law Brief; edi- 


tor of the Bulletin of Legal 
Developments; and author of 
Criminal Proceedure. 



A A 


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MANAGEMENT: Marketing and Advertising 


Government privatisations 


The ups and downs of 
share advertising 

Feona McEwan assesses the realities of the campaigns 


IF THERE were a prize for the 
most outstanding communica- 
tions effort of the 1980s, front- 
runners would surely be those 
who have been promoting the 
British Government's privatisa- 
tion share offers. Today one in 
five adult Britons is a share- 
holder. Four years ago, it was 
one in 80, though credit must 
also go to employee share, 
schemes. ' 

Before British Telecom in 1984, 
which was the largest flotation 
the world had seen and the first 
to aim heavily for the small 
investor, su gge stions that 20 per 
cent of UK adults would become 
share owners in so short a space 
of time would have been highly 
questionable. 

The task for marketers of pri- 
vatisation issues has been unusu- 
al, not to say perverse. They 
have been aiming for a success- 
ful share issue, out they have 
been forbidden from mentioning 
shares In much of their advertis- 
ing, especially on television. 
There could therefore be no 
recommendation; just an 
abstruse approach inviting the 
public to share in a company's 
future. Even worse, at the outset 
of the privatisation programme 
the public initially showed little 
interest. 

On the other hand, it helped to 
have a bull market and a govern- 
ment committed to the concept 
of 'people's capitalism.” Telecom 
was a resounding success and 
others soon followed to greater 
or lesser acclaim, including Brit- 
ish Aerospace, Britoil, British 
Gas, British Airways, and BAA 
(the airports authority}. In simi- 
lar promotional vein, out not a 

g overnment privatisation, was 
e TSB bank campaign. 

But is the very success of the 
government's flotation pro- 
gramme in danger of backfiring? 
All was well in a bull market but 
come the crash - which hap- 
pened last month - and the small 
investor catches a cold. What 
then? Given the consequent flop 
of the BP launch, critical asess- 
ment of the creativity of priva- 
tisation advertising has been 
superceded by questions about 
the morality of it alL Do new 
investors, many of whom have 
never played the stock market 
before, really understand its 
ways? 

It appears many don’t, since, 
despite an offer price well above 
that available in the market, 


more than 270,000 private inves- 
tors queued up for BP shares. 
Many believe this lemming-like 
behaviour underlines how much 
more education remains to be 
done. 

Anthony Carlisle of Dewe 
Rogerson, the communications, 
company that has guided six of 
the major flotations, including 
BP, prefers to point out the 
6.25m people who enquired 
about the offer but chose not to 
pursue it in the light of the 
changed climate. 

So was advertising at fault in 
any way, either in tone or 
weight? Did the government, 
through its blitz marketing tech- 
niques, con the public - or, at 
least, lull it into underestimating 
the risks by playing down the 
fact that shares can drop? Are 
the regulations in need of tight- 
ening as happened with takeover 
advertising last year? 

Certainly, one issue on which 
there is little debate is that 
advertising works in popular 
share offer marketing ana that it 
is needed in order to activate 
that market. 'In order to pro- 
mote the practicalities of wider 
share ownership, you have to tell 
people what you’re doing,” says 
one broker. 5 All campaigns in 
this respect have been success- 
ful" 

The difficulty arises with the 
attempt to achieve maximum- 
price as well as wider share own- 
ership. The BAA flotation in July 
underscored the problem. The 
demand generated was too great 
for the number of shares avail- 
able "The lesson, if there is one,* 
says one leading analyst, "is to 
have a restricted amount of 
advertising commensurate with 
the size of the share issue In 
future, with the benefit of hind- 
sight and the experience of BP, 
this aspect may need to be 
looked at.” 

Other City observ e rs are con- 
cerned with the increasingly 
dogmatic tone of the advertising. 
The message, “BP - Be port of it,” 
comes over as more of a com- 
mand than an opportunity, say 
some. ‘I think there will need to 
be a rethink about the use of 
media to ensure that the message 
put to investors is legitimate, ' 
comments David Clement!, man- 
aging director of Kleinwort Gri- 
eveson, which, as Kleinwort Ben- 
son, was the lead merchant bank 
handling the Telecoms issue. 

The message Is getting clearer 




5l 1 ^ p- . r/ P 


and firmer with every new Issue 
This is dangerous,” says one 
banker. 

In three years the slogans have 
moved from 'You can share m 
BT’s future,” to 'If you see Sid, 
tell him,” for British Gas, to 
“Now it's your turn to say yes” 
for the TSB, to "BP - Be part of 
it" 

However, the Chy noted with 
satisfaction that the government 
pulled the advertising when the 
market collapsed. “It behaved 
responsibly,' says Loma Tilbian, 
analyst with Sheppards. 

Views are split about whether 
there is enough of a government 
warning that share prices can 
drop as well as rise. Certainly 
commercials on television and 
posters do not cany that mes- 
sage, but then the advertising 
industry would argue that these 
media do not in fact promote 
shares directly. By comparison, 
all press ads and literature com- 
ing out of the share offer offices 
make it abundantly clear. 

Many city observers believe 
that since the price of shares in 
every privatisation issue after BT 
has increased, many people view 
the market as a gravy train. 

Beyond the financial and 
moral concerns, there is criticism 
on the creativity of share offer 
advertising. Deadly dull, unin- 




n 




ECOAYJ/ 


IMt % £ 




spired and boring are some of 
the kinder epithets. 

To address some of these issues 
it is necessary to track back to 
the flotation ■ that became the 
rul ebook of them all - BT. At the 
time, the marketing team han- 
dling the campaign admits it was 
working blind since there was no 
precedent - it was seven times 
bigger than anything previously 
seen anywhere including the US. 

When the run-up to the Tele- 
coms launch began in 1988 wider 
share ownership was more a con- 
cept in the minds of some gov- 
ernment ministers than a fact 
among the public. As it tran- 
spired, the drive towards the 
public was stumbled upon rather 
than pre-ordained, according to 
those involved in running the 
campaign. Up to two months 
before the share issue in Novem- 
ber 1984, City and media pundits 
were predicting a failure. Politi- 
cians refrained from talking 
about it until near the end. 

For the marketing men, the 
wider share ownership concept 
answered a prayer. Once It was 
mooted, the task of making a 


£4bn share issue a success - 
which was the brief - became 
viable. 

But theory was one thing, pub- 
lic interest another. First signs 
were negative A heavy research 
programme indicated the public 
could not care less. 

Gloom at Dewe Rogerson. 
Together with MORI, the poll- 
sters, Dewe Rogerson changed 
tack. Did people want to own 
part of BT, it asked. To its relief,' 
25 per cent said they were vary 
interested, which was more than . 
sufficient to see the flotation 
through. 

Research also showed that any 
lack of interest in share 
ownertudp owed maze to igno- 
rance than to feelings that such 
investments were risky. 

The findings provided the 
framework for trie marketing 
campaign. Long before the flota- 
tion campaign got under way, 
Telecoms agency, Doriand, had 
unveiled a corporate advertising 
campaign, "Power behind the- 
button*. Running counterpoint 
to this was an anti-privatisation 
campaign from the British Tele- 
communications Unions Com- 
mmittee. 

One of the the important 
points about marketing financial 
products is to avoid overt coer- 
cion. The IBA Code of Advertis- 
ing Practice specifically prohib- 
its the selling of shares on 
television. Also it forbids any 
hint of hype of the company 
being sold. Politica l advertising 
is also unacceptable and the 


Telecoms - campaign 'was 
regarded by many as political. 

Because of legal and other 
restraints, Doriand tackled the 
first-time investor by creating a 
sense of national event, the aim 
being to generate widespread 
interest by making it the talking 
point in pubs, offices and shops. 

The result? The public applied 
for more than five times the 
shares allotted. Six months later 
only d6m of an original 2m-ptus 
applicants had sold their shires, 
indicating that a large majority 
were not just stagging the issue. 

The cost? - about &12m for the ' 
corporate and Slim far the flota- 
tion campaign. British Gas, 
which followed, was an even big- 
ger deal at S5-5bn. The cost thb 
time was nearly 828m. 

Reflecting on the costs of pri- 
vatisation oudgets one banker 
remarks: ”Ifs driven by minis- 
ters who must ensure their tar- 
gets. I have some sympathy with 
than. For that sort of money is 
very very small compared with 
the total amount raised and for 
getting a happy voter/mvestor.” 

The creative approach of the 
Gas campaign, “Ifyou see ffid, 
tell him ,. is undoubtedly . the 
most memorable yet Sid got into 
the vernacular, into the head- 
lines and ultimately on every- 
one's nerves. But he worked. 
Every week in the two month 
run-up to the flotation, agency 
Young and Rubtcam produced a 
new TV commercial conveying a 
new angle on the sals informa- 
tion. 


• Financial Times Thursday November 12 1987 

Consumers willing 
if product is ‘able* 

The suffix is aU. Tony Thompson reports 
on the North American cult of convenience 


BUZZWORDS are the lifeblood of 
the packaged goods marketers- A 
few- years back it was "new” or 
Improved”, generally with the 
mysterious “formula X\ Now, it 
seems, Tess* and "more” are the 
trendy tempters to hook the 
healthy food brigade. And cus- 
tomers seeking convenience 
products are being dazzled with 
a barrage of labels using the suf- 
fix “-able". 

During the first six months of 
tills year, according to Marketing 
Intelligence Service, in Naples, 
New York, a consumer products 
reporting service, new entries 
purporting to be “disposable”, 
“raierowaveable”, “chewable”. 


Explaining the . high budget, Y 
and R’s deputy chairman, Tuq 
L efroy, says: -The stakes are 
massively high and the cost of 
failure immense.' Result? About 
4£m applicants - and &2m of. 
these were first-time buyers. 

Finally, there was BP. It began i 
with less than 25 per cent of 
people knowing shares were to 

be sold (this was a far lower i 
starting point than Gas which , 
had GO percent awareness). Also 1 
ft was a secondare offer of a ; 
government Make m an already ! 
public company, without the 
excitement of a new offer. 

Overall the BP advertising 
campaign cost about Slfim. There 
were 6£m enquiries, though in 
the wake of the stock market 
collapse, only 270,000 people 


ble” or “washable” amounted to 
'334, compared with 427 for the 
whole of 1686. The numbers look 
even more impressive when set 
against the tally for 1982 of 196 
which used the “aide” tag. 

With more than 50 per cent .qf 
US homes now owning a micro- 
wave oven, it is not. surprising 
that 'microwaveabllity* leads 
the 'pack with some- 181 entries 
recorded between January and 
June. Five years ago. the annual 
total of ■ microwaveable new 
products was only -47. This year 
American shoppers will be laced 
with more than 300 new choices 


to pop In their ovens. 

But the snack -on-the-run mar- 
ket is not the only trendy target. 
The diet conscious are also seen 
as a group worth pursuing. Joy 
Mauemoff, managing director of 
MIS In Toronto, was browsing 
through its database when she 
noticed that there seemed to be 
an unusual number of products 
positioning themselves as having 
more of the perceived good 
things in them and/or less of the 
well publicised baddies. 

A thorough search of the data- 
base proved her hunch. In 1987, 
MIS forecasts a total of 860 prod- 
ucts will be introduced or reposi- 
tioned by the “more” lobby, over 
double the 160 for five years ear- 
lier. Leading “mores" are cal- 
cium, vitamins, and real fruit or 
juice. 

Finally, there’s “less”. Less cal- 
ories is still a leader, but sugar, 
fats, salt, and other popular bad- 
dies are expected to feature on 
160 new or repositioned entries 
by year-end compared with 65 in 
1982. And those figures do not 
include “reduced” or the “sugar/ 
sait/fat /frees'. 

Indeed, there Is so little left of 
the ingredients that made some 
products popular that one begins 
to wonder if there is any point in 
buying them. 


THE 8R8WTH OF THE ABLE LABEL 



1982 

1984 

1986 

1987(est) 

Disposable 

ioo' 

136 

146 

137 

Microwaveable 

100 

115 

273 

411 

Chewable 

100 

146 

98 

115 

Pourable 

100 

139 

129 

128 

Portable 

100 

98 

112 

267 

Squeezeable - 
Washable * 

100 

100 

33 

42 

. 72 

53 

68 

114 


With the prospect of water and 
electricity privatisations hover- 1 
big in the wings, the role of 
advertising In the marketing of 
shares is likely to continue to be 
a modal one. On the question of 

within^the'marke^ng industry ' 
and the City is that such cara-i 
paigns serve the purpose of gen- 
erating wide public interest. 

However , u is on matters of. 
tone, content; and the sheer , 
amount of the advertising that ! 
opinions are clearly split. For 1 
any future privatisation Issues 
the cost of campaigns may well 
be called Into question and there 
may be pressure for the message 
to indicate more clearly the 
nature of equity investment. 


Marketing 

abstracts 


The Next headquarters, byC 
Davies and R Barbrook in The 
Architects' Journal (UK), 87 
May 87 (16 pages) 

A feature on the retailing cozn- 
uany’s HQ. The drawings and 
pictures give an impression of a 
great deal of steel; the text 
points to the desire to involve 
everyone, for Instance through 
the use of a mall with mock 
shops. Refers to -the building's 
role in reflecting the . Next lifes- 
tyle. 

Marketing the pr e mi u m prod- 

■ct 9 by JA Quetch in Business 
■Horizons (US), May/Jun 87 (7 
pages) 


Examines factors contributing 
to the gr o w t h of premium mar- 
keting - the marketing of high 
quality, high priced and selec- 
tively distributed brands of con- 
sumer goods. Indicates several 
important facets of the 'premi- 
um' tag, explores the options 
open to mainstream marketers 
.wishing to enter the premium 
market, and notes pitfalls - par- 
ticularly the dangers of an over- 
aggresave or over-conservative 
marketing approach. Outlines 
strategies for maintaining 
growth and staying on tap. 


TbaM ababmda an oondanaad Mn Matt- 
mrueOng Joumate yuM Wa by Anbar Urn*- 
aoaanrt PubUamfan*. Ucmrmod coptm* at thm 
«ribM mtkbm nug bm obtdnad at a oott <* 
84 aach (fndutAna WT and p+fK oath MM 
ardmy tam Jbtbar. PO Boa S3. WamUay HAS 
SOL 



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Financial Times Thursday November 12 19S7 


ARTS 


Exhibitions in Geneva/Paula Deitz 


Led by the Minotaur’s 


Geneva is a ■ market town of 
European culture, a crossroads 
where intellectual movements 
from- many countries meet. Its 
own contribution to this 
melange has long been the artful 
as soc iation of word and image in 
its finely printed, illustrated 
books. And currently a provoca- 
tive exhibition at the Musee 
Rath, Minotosure: From Picasso 
to the Surrealist ■ Albert Skira's 


realist painters Dali and Tanguy 
is no longer as fresh and Modem, 


particularly of the softly illumi- 
nated tree trunks in his Quai de 


Bercy,’* or of the silhouetted 
'Roofs seen from the Rue la Boe- 


venture (to 31 January) pays 
tribute to the Geneva publisher. 
Skira, whose name is synony- 
mous with the marriage of art 
and poetry. It also evokes the 
period from 1933 to 1939 when 


period from 1933 to 1939 when 
his review, Minotaure , published 
in Paris, was a critical catalyst in 
the development of the modem 
movement in art 
Contrary to the articles on 
already established artists pub- 
lished by to-day's art journals, 
Mmotawre was conceived by its 
founders as the core of the cre- 
ative moment itself. Its role in 
the visual arts and other emerg- 
ing fields - like ethnography, 
archaeology, psy coanalysis and 
the performing arts - was to link 
them to what the editors forsaw 
as a universal Poetry. Nothing 
now published about Lhe arts, 
which tend either to look to die 


past for inspiration or thrive on 
idiosyncratic independence, eom- 


idiosyncratic independence, com- 
pares with the 13 Issues of Afftio- 
taurg, which embodied a vision, 
as the London art historian Val- 
erie Holman states in the cata- 


tie.' 

Photographs were also used to 
report the creative process, like 
Brassai's photographs of Picas- 
so’s Boisgeloup Studio in the first 
issue, which show unfinished 
sculptured heads as they relate 
to each other, a charcoal study of 
one head gives an even earlier 
view of the image. Picasso was 
already absorbed with the myth 
of the bull-headed Minotaur 
imprisoned in the Labrynth, as 
was Andre Masson, before the 
image became the review's sym- 
bol; and his cover collage for the 
first number featured his distinc- 
tively muscular Minotaur, seated 
and holding a dagger against a 
background of lace doilies, corru- 
gated paper and leaves. This 
cover design and subsequent 
ones by Miro, Dali, Matisse, 
Magritte and others open the 
exhibition, and - as almost the 
best art in the show - in series 
follow the progressive develop- 
ment into tiie Surreal. At the 


end, Breton’s pre oc c upation. -with 
Mexican art is reflected in .the 
final cover by Diega Rivera,, of 
an upside' down Minotaur; over 
scattered skulls and hones: . 

One entire gallery is given over 
to the second number, which 
covers the 1931-1933 Dakar-Dji- 
bouti mission among the Dogon 
People of west Africa, sponsored 
by the Inqtitot d’Ethnologie in 
Paris. Though we are no longer 
strangers to African art, the 
stark display of masks embel- 
lished by shells, beans, and 
braided fibre nevertheless con- 
veys the power of that earlier 
experience, when European art- 
ists first made contact with these 
ethnographic which were 
to become one more ingredient 
in Che. Modernist sensibility. 

Throughout the succession of 
rooms, the pace quickens until 
the full flowering of Surrealism 


’ tured of Tristan Tzara’s Shad- 
ows,' and Joseph Cornell's 
'Assemblage under Glass Bell' 


of a hand holding a rose, .still 
fascinate and puzzle in a way the 
now more obvious pictures, with 
their juxtaposition of strange 
objects, do not 


in the lower galleries, accompan- 
ied b y num erous example of the 

more extreme automatic or spon- 
taneous processes, like the 
'Deqalcomanias'* created by 
Breton and his friends, that 
resemble variations on caverns 
in . snowstorms. In the main, 
sculptures triumph over paint- 
ings, for assemblages like Hans 
Arp’s painted wood relief of 
amorphous shapes called ‘Tor- 




logue, 'by showing the whole 
process from idea to form.* 


process from idea to form.' 

Organised by the Musee d'Art 
et d'Histoire with scholars from 
Geneva University and support- 
ed by IBM, the exhibition's 300 
works, which include paintings, 
sculptors, collages, 'drawings, 
prints and photographs, are 
drawn from those featured in the 
Reviews’ 1600 illustrations. 
Where specific works could not 
be obtained, those dose in spirit 
were selected; and archival mate- 
rial - postcards, letters and other 
personal memorabilia, carefully 
interspersed, relates the texture 
of the experience as the editors 
shifted from classic tastes - 
Picasso, Matisse and Braque - to 
the Surrealism championed 
under the later guidance of 
Andre Breton. 

Seeing these works in tranquil 
galleries 60 years after the fact, 
one can sense nevertheless the 
ferment of how 'everything led 
to everything else, by the widest 
variety of processes,' as Profes- 
sor Emeritus Jean Starobinski 
writes in the catalogue. On the 
other hand, 50 years have 
passed, and what once seemed 
daring in the free-associative and 
subconscious images of the Sur- 




rY-'l -n-V X 


KOTOS' 7 


And again Brassai’s photo- 
graphs in his surrealist mode of 
a rolled -up bos ticket against a 
textured background, or another 
of Picasso’s r eli e f s. 'Butterfly 
Collage," underline in this exhi- 
bition that photography is the 
triumphant survivor' into our 
time. Not’ only Brassai's work, 
but also Man Ray’s suggestive 
"Veiled Erotic,' or his humerous 
rendition of the Minotaur image, 
using a female torso. And from 
Mexico, the photographs of Man- 
uel Alvarez Bravo depict inti- 
mate views of the life and ruins 
of his country. 

Sidra himself comes off well In 
the exhibition, with portraits by 
Brassai, Man Ray, Matisse ana 
Glocometti, as do the illustrated 
books he. .commissioned -* 
Matisse's etching* for Mallarme’s 
poems and Dali's etchings for the 
Comte de.Lautreamont's "Leg 
Chants de Maldoror." The cata- 
logue itself, .published in sepa- 
rate English- and French editions 
and produced tinder the direc- 
tion of Editions d’Art Albert 
Skira in Geneva, is a kind of 
final souvenir of Minotavre, 
with many interviews with sur- 
viving participants, like Andre 
Masson before his recent death. 
After Geneva, the exhibition 
moves onto the Musee d'art Mod- 
eme de la Ville de Paris,' 17 
March - 29 May 1988. 


( £ 


* \'a 5 J'V '-4 • V • 

hi Va, *3. v .•« ~* 4 . • *0 










Picasso's frontispiece for Minotsnre NoJ. 


4-hand Ravel/Wigmore Hall 


Canricom/Purcell Room 


David Murray 


Richard Falrman 


It may have seemed a 


for the justly admired pianist 
Angela Hewitt to round off her 
solo Ravel recitals with a pro- 
gramme of his music for four 
hands. On Tuesday it proved a 
mistake that should under no 
circumstances be repeated. The 
best duo-pianists are rarely 
full-time soloists; in tandem. 
Miss Hewitt was hardly recognis- 
able as the notable artist she is. 
No blame attached to her part: 
ner Alriko Ebi (who seemed, as 
far as one could tell, to be anoth- 
er accomplished performer), nor 
was there any serious clash of 
intentions or style; they simply 
made a lacklustre, barely compe- 
tent team. 

They hit rock-bottom at the 
start, in a performance of the 
duet-suite Ma Mere VOye - Rav- 
el’s only substantial four-hand 
work - that was bumpy, loud, 
gracelessly rushed and angularly 
ill-balanced (often faithless to 
the composer's mar kings, too). It 
is inconceivable that either of 
them alone would sound like 
that in. say, the Vaises nobles et 


soruimenlalcs. They did no par- 
ticular harm to the only real 
two-piano pieces, the tiny "Fron- 
tispice" and the early Sites auri- 


two-piano pieces, the tiny “Fron- 
tispke" and the early Sites auri- 


claires . a transcription of the 
“Fanfare' Ravel contributed to a 
ballet raised a suspicion that 
they hadn't consulted the or- 
chestral version. 

The suspicion was probably 
unfounded, for everybody knows 
the opulent second Daphnis 
Suite, and yet the main musical 
threads here were submerged 
time and again amid hopelessly 
erratic dynamics. Their “Danse 
generale" was a churning grey 
soup. Leon Roques’ workaday 
transcription - Ravel had the 
sense not to attempt one: he only 
transcribed some gentler sections 
for solo piano - is of the kind 
that leaves all the work of sort- 
ing out the sound to an experi- 
enced, resourceful duo; a novice 
pair hasn’t a chance. 

The Rapsodie espagnole is a 
leaner score which the composer 
transcribed admirably, and his 
two-piano “version" of La Valse 
was actually, 1 think, the origi- 
nal. Between them they enjoyed 
perhaps a total six or eight min- 
utes of goodish playing; but in- 
different ensemble devitalised 
much of the Rapsodie which 
seemed a blurred carbon of itself; 
and balance-problems repeatedly 
sabotaged La Valse. 


It is too early yet to tell what 
lasting changes at direction the 
new Soviet policy of gbunost is 
likely -to promote among the 
country’s musicians (a' Russian 
colleague tells me there is barely 
an area of life in which it is riot 
already starting to have an ef- 
fect). But Tuesday's recital- fay 
the chamber group .Capricorn - 
am of a pair, the other following 
tonight - rather seemed to beg 
the question. 

For though it gave us four ao- 


faave materialised from nothing 
at an, so' Ught and airy are its 
textures. This is music of the 
utmost refinement and the deli- 


tive composers, each striking out 
on a new and individual path, 
almost an the music that was 
played dated from just before the 
giasnost era.' Perhaps the most 
that can be said with any degree 
of certainty is that recent com- 
positions often show a leaning 
towards beauty of sound for its 
own sake that we -might not 
have expected a couple of de- 
cades. ago. and so far the trend 
seems likely to continue 


remains a law unto himself. Air 
of hi* -works indulge parody and 
grotesqueries that set them un- 
mistakably apart and the Piano 
Quintet- (1976) is no exception; 
but in its two slow movements 
(played with ad mir abl e concen- 


tration by the members of Capri- 
corn) this piece also plumbs dis- 
turbing depths c t hlackness and 
despair. It seemed to me the 
most substantial and important 
item of the evening 
The programme was completed 
by. the earlier of Shostakovich's 
nano Trios and a couple of 
pieces by Arvo Part - Fratres 
and Spiegel «m Spiegel, whose 
very - simplicity of language 
speaks of a composer who is dif- 
ferent yet again. When pieces of 
music as diverse as these are set 
one after the other, it certainly 
becomes difficult to reconcile the 
concept of an official Soviet mu- 
sical style imposed from above 
with -what one hears. 


Both Elena Firsova’e Spring 
Sonata (i960) arid Edison Deni- 
sov's. Clarinet Quintet (1987) foil 
enchantingly into this category. 
While the Denisov piece does at 
least keep a distinct melodic pat- 
tern under its rippling waves of 
sound, FIrsova's Sonata seems to 


Arts guide 


Exhibitions 


Velazquez with a portrait of Phi- 
lippe IV in his hunting clothes, and 
Goya with a portrait of Marte-Loo- 
ise in a Mack-lace mantilla. 

Picasso's Century is dominated by the 
master, from the period of analytic 
cubism to 20 preparatory sketches 
for Guernica and to his last works. 
But there is also Juan Gris, and 


LONDON 


The Tate Gallery. Turner in the 
new Clore Gallery: The Turner 


unmusnea, ana a luiumr m 

so watercolours and drawings, has 
been a source of controversy and 
dissension ever since it came into 
the nation’s hands more than 130 
years ago. Turner had always 
wished for a gallery to himself 
which would show all aspects of his 
work. Whether he would have 
approved of James Stirling's exten- 
sion to the Tate as a suitable setting 
Is a nice question. The larger paint- 
ings may be hung too low for one 
wro lived In a more ostentatious 
age. and the tasteful oatmeal Stir 
ling has decreed for the principal 
galleries is a far ay from the rich 
plum he is known to have pre- 
ferred. The vulgar neo-deco of the 
entrance hall has little to recom- 
mend it. But eight rooms for paint- 
ings and one for watercolours give 
room enough, and with the three 
reserve galleries upstairs, every 
painting out the few in restoration 
or on loan Is on the walL 


Mira, Dali and Tames. Petit Palais, 
Ave Winston Churchill; Musee 
d'Art Modeme de la VOIe de Paris, 
Ave President Wilson. Both exhibi- 
tions are dosed on Mondays and 
both end on Jan 3. 


Artcurial, 9 Ave Matignon 
(42991616). Ends Nov 14 
udacape l> the Flemish and 
Dutch Scho ol s ! Light .and colour 
change but the painter’s pleasorein 
recording them never varies. The 
Brueghel Dynasty, the Bredael 
Brothers ana Chases Beschey are 
repres e nted in paintings on c opp er 
(dates or wooden panels at unas- 
suming proportions but in ah the 
perfection of their art Galerie d’Art 
Saint-Honore. 267 Rue -Salnt-Hon- 
ore (4260 1583}_ Ends Dec 4 


The face, found in Egypt only 20 
years ago, waa loaned by a who 
Museum. Another highlight is a 
r e c on str u ction of the 3000 year old 
burial chamber of Sehnefer, the 


former mayor, at antique Thebes. 
Clothes, ' household appliances, 
try Ulus- 


Clothes,' household 

tods, cqometics and l 


tnte the e v ery da y meat Egyptian 
citizens. Ends Nov 29. • __ 


Berlin: Galerie im Ratham TempM- 
hot Terrroelbafer Damra 166c (bin- 


Fragonard: The Grand Palms is stag- 
ing the first retrospective of Fra- 
gonard in collaboration writh the 

Metropolitan Museum, New York. 


WEST GERMANY 


About 100 paintings and as many 
drawings celebrate the artist’s love 
of beauty, in which he saw a mani- 
festation of “nature's perfect 
health’. The depth of observation 
in his Roman landscapes, mytholog- 
ical scenes and portraits counter- 
balances the decorative facility of 
the Scenes Galantes so typical of. 
the 18th century. Grand Palais. 
Ends Jan4 

Artcurial presents a panorama of 1? 
years of its activities in favour of 
contemporary art as a gallery, a 
library and as an editor oPmuMe 
originals' of statues and jewels, 
contemporary furniture, Sonia 
Delaunay’s personal dinner plates 
and a 1930 carpet. The gallery’s 
exhibitions have tried to present 
the image of the 20th century. 
Sonia Delaunay was followed by 
Giorgio de Chirico, Zadkine's retro- 
spective by Man Ray photograspto. 
There was sculpture by Chadwick 

and the art of the paster by Matisse. 
All culminated in a homage to the 
late President Pompidou - like Art- 
curial a lover of the avant-garde. 


Munich, Staatag&lerie Modemer 
Kunst Sculpture from the German 


PAMS 


Five Centuries of Spanish Art: An 

ambitious ensemble of four exhibi- 
tions retraces the history of Span- 
ish art from the Golden Age to 
today. The two most imnportant' 
exhibitions are Greco To Picasso at 
the Petit Palais and Picassos Cen- 
tury at the Musee d'Art Modeme. 

In the Petit Palais is Greco with a 
vast visionary Baptism of Christ, 


Democratic Republic (East Ger- 
many) A result of the cultural 
agreement of May 1986 between 

East and West Germany, this exhi- 
bition indudes 190 sculptures,- some 
of theta larger than fife,.and about 


hot, Tempdbofer Damm 166: Gun- 
ter Gauss paintings, drawings, etch- 

hie 60th birthday and covering 1967 

to 1987. Ends Nov 20.' . . 

■den-Badea: KunsthaQe UddentaP 

*r ADee 8a: Carte Carre: The first 
German r e tr o sp ective at the kalian 
artist who was caw of the in i tiators 
of Futurism. His artistic life under- 
went dramatic change when be not 
de Chirico. Ends Dec 6. 


60 paintings of sculptures by 51 
artists, and covers four decades. It 
offers a view of graphic works that 
have not even been seen in East 
Germany before. Among the artists 
are Gustav Seitz, Fritz Cremer, 
Werner Stotrer, Hermann Gkjcknsr, 
Waideman and Sabine GrzUnek, 
IngeboM Huntings* and Frantiska 
Lobeck. Tiov 6 to Jen 3L Mannheim 
Stadtisdie Kunsthalle from Jan 23 
to Feb ZL 

HUdeoheire, Roeraer- und Pfell- 
zaeus-Museum. Am Steine 1-2. 
Egypt's rise to a World Power: Mine 
than 300 pieces loaned by 20 muse- 
ums in Europe, Africa add America 
• the first presentation of the most 
important 160 years 1660-1400 BC 
of the New Empire in Egypt The 
bust of Pharaoh Thutmcsls m, da- 
covered in 1907 without a face, can- 
he seen complete in H l ldps h pim . 


ITALY 

Sow Pahuxo Ve nez i a: Bka Lazzmy 
(1900-1981).- 150 works in 
add acrylic by one' of the fins Ital- 
iaa artists ter abandon figurative far 

abstract art Ends Nov 22. 

Somes Palazzo Venezia: works 
found during excavatkait at Lake 
Dtan .in southern C hi n a in the 
1960s. Ends Nov 16. 


; NETHERLANDS 

Rotterdam, Prim Hendrik Maritime 
Museum. Art as camouflage;; or 
camouflage as art? The startling 
'applied varttdsm'of marine dazzle 
painting developed in the First 
wbridwar by Norman WlDunson 


nuiu nu .ujr u miinn " 

to deceive the enemy- aa-toA Mips 
teal position and course. Ends Dec 
6 . 


The New Tnn/Swan. Stratford-upon-Avon 


Michael Coveney 


Here is a real surprise, and a real 
treat. There are plays of Ben 
Jonson you might have expected 
to see in the Royal Shakespeare 
Company’s Swan Theatre at 
Stratford-upon-Avon, but The 
New Inn, unperformed since 
1629, save for an unremarked -re- 
vival at the Chelsea Arts Chib in 
1903, would not be among them. 

The first performance was 
hooted off and Dryden and Ha- 
zlift (‘A play I c&n read with no 
patience j are discouraging. Jon- 
son was bed-ridden after suffer- 
ing a stroke and never saw it 
acted* though he had no qualms 
about blaming -the 'negligent 1 ' 
actors and ‘squeamish audi- 
ences for its failure The KSC 
director, John Caird, however, 
uncovers a glowing comedy or 
tavern life and romantic recon- 
dhation that relates the play to 
the best RSC humanist tradi- 
tions : The Winter’s Tale meets 
Nicholas NickLeby. It also comes 
across as a near perfect resolu- 
tion of the Jonsoman intellectual 
tension between learning and he- 
donism. 

The eponymous hostelry, the 
Light Heart at Barnet, is as meta- 



phoric a mansion of pleasure as 
Chaucer’s Tabard Inn or Shakes- 
peare's Boar’s Head Tavern. The 
Swan itself becomes- this place. 
Good stock the Host (Joseph 
O'Conor) keeping a seat among 
the audience while the Burton- 
•ian .melancholic scholar, Lovel 
(John Carlisle), defies the invita- 
tion to pleasure in a candlelit 
eyrie, where we see him dissect- 
ing insects under a magnifying 







jfl ■ ' SS|‘ilfc8 :|lfe ft; 

' J 





John Carlisle and Fiona Shaw 


In keeping with this tradition. 
Just ap the kill from the 
Masee Bath at 11 Grand Bae 
in Geneva’s Old Town, the 
OeTTnrle Patrick Cramer has 
been exhibiting fourteen of 
the randy seen lithographs by 
Braque which fflastrate Bene 
Schmr's poem "Letters amo- 
roso," in a 1968 edition pub- 
lished in Geneva by Edwin 
Engelberts. Seen together, 
these prints bring to the sur- 
face (he freshness of Bra>- 


qne’s whole catelogne of 
linsgos, as well as of Ida dis- 


tinctive pallet - from deep 
Braqne bine to the palest 
green. "Le soleil," with leaves 
seen through a transparent 
■ub birds in fHgbt; a atm life 
with lemons; and richly 
bloo mi ng Irises ere the per- 
fect complement to Char’s 
prose poem Inspired by a 

nMl CM m mp mriHn n of Hbll- 

tevetdi. 


The ever enterprising Gate The- 
atre, above the Albert pub in 
Notting Hill Gate, has launched a 
wide-ranging Japanese season. 
Playreadings are promised, be- 
sides workshops on poetry, mu- 
sic and performance; cookery 
and fashion are scheduled In a 
mini-Nipponese festival spon- 
sored by the GB Sasakawa foun- 
dation and the Japan Founda- 
tion - a fit gesture of confidence 
in this tiny powerhouse whose 
ambitions nave always coura- 
geously exceeded their, air-condi- 
tioning. 


cately expressive flute solo of 
Beana Ruheman did it .full jus- 


* Shnitke, meanwhile, defiantly 
remains a law unto himself. Air 


The theatre of racial oppre s sion 
thrown up by inner city Britain 
in the *808 has a new exponent 
in 24-year-old Harwant Bains, 
the British-born son of Punjabi 
parents who has set his first play 
in his native SouthalL His theme 
in The Fighting Kite is the 
struggle for living space by a 
generation of young Aslans 
boxed in on the one hand by the 
aggression of white, working 
class racism, and on the other by 
the outdated traditionalism of 
their own parents. 

Kulwant, Khalid and Gurdeep 
are three such youths who se re- 
actions to a common adversity 
have sent them down very dfr- 


Art Ins t i t u t e: 48 kfey Impressi oni st 


and Post-Impressionist works from 
the CourtauJd collection tour Amer- 
ica with paintings by Cezanne, 
Manet, Renoir, Seurat end Gauguin. 
Ends Jan 1 . ' 

Amsterdam: Rijksmuseum Prin- 
troom. As a pendant to the survey 
of landscape painting in the main 
galleries, the printroom is showing 
a fine selection of 100 I7th century 
drawings devoted to the theme of 
Land and Water. Qm!b Jan 3. - • 

Amsterdam: Historical Museum. 
Contemporary photographs, .uten- 
sils, menus am registers chart the 
rise and heyday of Arastadwns 
grand hotels from .I860 to 1914. 
Ends 'Jan 17. 

Amsterdam, RIJfcsmu«mmi - A 

sweeping view of 17th -can tarv 
Dutch landscape p rintin g , with 
mare than 100 works by over 50 


gen Museum, From Ingres to 
Cezanne presents a rich choice 
from the museum's larre collection 
of 19th century French drawings. 
Ends Nov 29. 


drawings. 


Leiden: Rijksmaseum voor Oud- 
heden. Manuscripts, books and 


SPAIN 


Barcelona: ‘Leonardo da Vinci. 
Nature Studies*. 60 drawins on 
loan by the Royal Library at Wind- 
sor Castle, shown recoitly at the 


I The nostalgic, reflective vein 
of the play is a statement of Jon- 
son 's dissatisfaction with the 
present. The. Tudor values of ed- 
ucation, nobility and honour are 
recalled in the muscular conver- 
sation of the-Host and LoveL The 
latter's love melancholy is fed on 
an infatuation forbidden by his 
sense of duty to the young noble 
Beaufort, himself a suiter of the 
Lady FrampuL When these two 
arrive, in separate trains, revels 
are instigated in the form of a 
Court of Love, presided over by 
Frampul’s ingeniously creative 
servant Prudence (a lovely per- 
formance by Deborah Findlay). 


In exchange for two kisses, 
Lovel delivers two long Platonic 
speeches in praise of Love arid 
Valour. They are' among the fi- 
nest things Jonson wrote, and Mr 
Carlisle’s delivery of them is 
electriiyixig. Not only does heat- 
tack the tavern km life and its 
podturers so beautifully delin- 
eated in other scenes, he also 
shatters the masque-like artifice 
of the charade with eloquent 
persuasion. . The virginal Lady 
Frampul (Fiona Shaw) is quite 
undone and melts. Miss Shaw, a 
temperamentally non-submissive 
a c tr ess , registers the onset of 
passion with a wild-eyed panicky 
confusion. 

As Anne Barton has printed 
out in her Tn^ji»«He study of Jon- 
son (published in 1984, the same 
year as Michael Hattaway’s su- 
perb Revels Plays edition of this 


text, an essential companion to 
the RSC's programme), The New 
Inn is a Shakespearian wish- 


dream. Dressing ub leads to char- 
acter revelation. The host is no 


Dowdeswell’s golden lighting. 
The comic and metaphoric 
worlds are linked in the splendid 


acter revelation. The host is no 
more what he seems than is the 
old Irish beggar woman who 
nurses his supposed son. A fami- 
ly is reunited, rnarriages pro- 
poeed. The ephemeral chill frit 
by Lovel at the end of his ordeal, 
as of “a court removing or an 
ended play,* is a prelude to the 
promise of happiness he has 
earned. 

ft is this discovery of the play’s 
dramatic motor that makes the 
revival so exciting. The company 
inhabits the play and the theatre 
(the two coalesce) with an irre- 
sistible relish, much aided by 
Sue Blane's glorious Caroline 
costumes, Guy Woolfenden's 
mellow song setting! and Wayne 


force of the tailor Stuff Gan Bar 
ritt) who kickstarts his libido by 


his wife Piiuuudo (Jane 


and seducing her in the suburbs. 
Romford, Croydon and Houn- 
slow are other favoured sexy 
bolt-holes. 

But all of Mr Caird’s tavern 
fantasists come to unforgettable 
life. Richard McCabe’s hilarious- 


ly Hispanic Sir Glorious Tipto 
and CUve Russell’s sinister su- 


pervisory Fly are the vital, con- 
versational counterpoint to the 
bedrock realism of the resident 
staff, notably Griffith Jones's 


wonderfully imperturbable 
chamberlain and Jimmy Gard- 
ner's gibbering and put-upon lit- 
tle ola ostler. 


Mishim a Plays/Gate, Notting Hill 


Martin Hoyle 


Lady Aoi, takes the time-hon- 
oured, theme of demonic posses- 
sion: a young wife is troubled by 
the malign spirit of her hus- 
band’s former m is tress. Mishima 
sets the story in a private hospi- 


Yasuko’s hiss that it is "only a 
chicken gnawed by a fax.” A fi- 
nal twist reveals what had in 
fact been implied from the be- 


tal room (a cool white intenor 
designed by George Souglldes 
with windows for the final 
grand guignol flourish) where 
an increasingly dotty nurse con- 
fesses hereelf attracted to the pa- 
tient's husband. "We’ve all been 
psycho-analysed and all our sex 
copnplexes have been cleared 
up»“ she thfobs. "All of them." A' 
mysterious, stylishly-dressed la- 
dy who visits the unconscious 
invalid at midnight turns out to 
be Yasuko, the discarded mia- 


ginning Yasuko is at home in 
bed; this is her spirit leaving her 
body to torment the rivaL 
In Hattfo Mishima adds a dash 
of bittersweet abrasiveness to 
the legend of the girl who went 
mad waiting for the ret urn of 
the lover with whom she had 
exchanged fans. In the original 
he returns, she recovers and a 
happy reunion ensues. Here the 
gM Is protected by a spinster 
painter- of 40 (her description, 
feminists, not mine) who tries to 


They kick off with a double- 
in of short plays (about half an 


bffl of short plays (about half an 
hour each) by the late bizarre 
Yukio Mishima who characteris- 
tically s y neretfoes native tradi- 
tions with a sardonic modernity, 
one eye on western influences, 
and proves that there are Noh 
plays like home The first, The 


such loud voices." The romantic 
image of love is preferable to the 
reality. The girl is left with the 
memory of the eternally unat- 
tainable; the woman keeps the 
girl, equally unattainable. 

Donald Keene's translation is 
clear and unobtrusive. In Robert 
J.. Carson's production Siobhan 
WOls makes a sleekly supernatu- 
ral mistress and a desperately 


yearning spinster, while Jack 
Fortune convinces as a smoothly 


ineffectual husband (his return- 
ing rover is slightly less fo- 
cussed). Kate Gartside is both 


keep her apart from, the return- 
ing man. This, it transpires, is 


tress ; she evokes magic nights on 
the lake to. hire baric her spell- 


the lake to. hire baric her' spell- 
bound . lover. Moans from -the 
tossing figure on the hospital bed 
break the enchantment despite 


mg man. This, it transpires, is 
unnecessary. The girl refuses to 
recognise him, claims he has the 
face of a dead man, and stays 
with the older woman, with a 
final T hate people who talk in 


cussed). Kate Gartside is both 
devil-stricken wife and romanti- 
cally crazed geisha; Adrienne 
.Hill quavers loqpfiy as the nurse, 
a warning if any were needed 
against the privatisation of the 
health service. Two rarities 
gratefully received. Sundry Japa- 
nese attractions continue until 
December 19. 


The Fii 


Kite/Stratford East 


CSalre Armitstead 


ferent roads: Kulwant (Dominic 
Hingorani) is a college dropout 
who waxes lyrical about “alien- 
ation;’ Gurdeep is the embodi- 
ment of the 'mercantile ethic and 
Khalid (Neran Persaud) styles 
hlHfmrff sentinel of a community 
under siege. 

“If it wasn’t for nutters like 
me,”- be tells his sister, who is 
fighting her own battle for 
emancipation, “you wouldn’t be 
able to walk free." And that, de- 
spite the fact that his death be- 
comes inevitable as soon as he 
arms himself against the taunts 
of tiie local boot-boys. 

Bains’ message- is a depressing 
ana that like the game of fight- 


kites from which the play 


its name, urban life today 
aritorial contest which wul 


is a territorial contest which will 
only end with the severance of 
one or other contestant- The on- 
ly way . to survive is to buck the 


game, either through cowardice, 
like Sunil Tanna's shopkeeper 
Gurdeep, or, more interestingly, 
through some sort of higher wis- 
dom, like Guru, a character who 
is part clown, part tramp and 
part wise man, who wears a tea 
cosy over his turban and con- 
sults the stars for unreliable rao- 


With Guru, imbued with an 
impish charm by. the estima bl e 
Dev Sagoo, Mr Bains taps into an 


Indian classical tradition of gods 
in unlikely guises; relaxing into 
a character and a speech that are 
interesting, amusing and origi- 
naL 

Elsewhere, his dialogue tends 
to emerge as manifestos from 
characters who run predictably 
to type. Much of the acting is 
immature and much of the stag- 
ing clumsy. Jeff Teare’s direction 
furnishes a brutish opposition of 
bleach-faced skinheads who roar 
from the walkways like caged 
bulls, but his production is never 
tight enough to capture the men- 
ace and looming tragedy that 
should stalk the characters 
through the play. 


Saleroom/Susan Moore 


November 6-12 Punters back Spencer 


Metropolitan Moaeum, Stockholm 
and. Tokyo. Centro Cultural La 


and Tokyo. Centro Cultural La 
Caixa, Psseo de San Juan 108. Eads 

Madrid: “Beuys, Klein and Rothko 
Transformation . and Prophecy*. 
Centra Caitaral de la Gain, Ser- 
rano 60. finds Nov & 

Madrid: “Mark Rothko 1903-1970*. 54 
w ork s by North American artist of 
Russian origin grouped with de 
Kooning and Pollack. This show 
was seen' recently at the Tate In 
London. Fundacion Juan 
Maich,Caste0o 77. Ends Jan A 


Sir Stanley Spencer's spectacular 
'Christ Preaching at Cookham 
Regatta: Punts Meeting" soared 
way over estimate at Sotheby's 
yesterday to establish a new 
record price for the artist - 
6429,000. The previous record, 
set at Christie’s in June, was a 


and John Piper selling well. 
(Perhaps Piper as well as Spen- 


cer has* found a new audience.) 
The sale totalled £1.499,850, with 
31 percent bought in. 

auction of "Irises* at Sotheby's in 
New York, the two canvases by 
Van Gogh offered at Christie's 
were berth bought in at £65,000. 
So was Schiele's "Lieberspaar* at 
£3.4 million. But what must have 
encouraged the York Avenue 
auctioneers was the strength of 
Japanese bidding. The Motoma- 
chl Gallery paid £528 million, 
well over estimate, for a Renoir 
portrait of. a young girl of 188 a 
Japanese collectors secured Kan- 
dinsky's landscape (£2.42 mil- 
lion), Monet's “Printemps, bowl 
de PEpte* (£1.43 million)/ and a 
Miroat£Ll million. 

The Art Institutze of Chicago's 
Monet waterliUes went for an 
expected £3.3 million, while 

nanffin'e ■ lanna & 1 . 


modest £75,000. A major canvas 
by Spencer has not been seen 6n 


NEW YORK 

MetropoHta* Kaseumi 200 objects 


from the Age of Sultan Suleyman 

. the Magnificent demonstrate .the 
wealth and skills at the high point 
at the Ottoman empire in the six- 
teenth century through the large 

. s e lecti o n of illuminated manu- 
scripts, the imperial wardrobe, 
ceramksrand jewel-encrusted weap- 
ons. folds Jaa 17. 


artists tracing the development t if 
the genre ana its offshoots from the 
dense creations of Vinckboona and 


Savery via the chilly winters of 
Avercamp, the tzanqmUts ' of Roys- 
dael, the golden light of Com the 
towering cl o udacapea of Sufrdsel, 
to the wooded soenes.of Hobbema. 
Ends Jan a „ _ 

Rotterdam: Boymans-Van Bemun- 


by Spencer has not been seen tot 
the market since “Girls Listen- 
ing," from the same' regatta 
series, was sold In 1982. 

Perhaps mare surprising still 
was the £79,200 paid by the 
same private collector for the 
small self-portrait of 1951. Of the 
three Spencers on offer, all from 
Australia, only "A Musk: Lesson 
at BedaXes" foiled to reach its 
target; bidders were no doubt 
discouraged by its poor condi- 
tion- 

The fortunes of Sir Alfred 
Mannings were more mixed, 
with prices apparently affected 


anuscripts, books and 
ning 1,000 years of seten- 
inatkra and knowledge. 


Pew ter for Afri can Art: Angles on 
African Art- features ten co-cnra- 
tora, ranging from an African 
tribesman to collector David Rocke- 
feller, end: of whom dune ten of 
their favourite pieces, making a 
well-rounded and diverse show. 
■Other curators are writer James 
Baldwin, artiste Nandy Graves and 
Roxnare Bearden and curator Wfl- 

M»m BnMn Enik Jn g 


by recent low prices in New 
York. While the portrait of Sir 


York. While the portrait of Sir 
Gordon -Richards mounted on 
George VTs Sun Chariot fetched 
£93,500 (estimate 50-80,000), the 
Impressive one-owner portrait of 

the Duchess of Westminster with 
her harriers was bought in. 


Gaugin's "Jeune homme a la 
fleur" doubled its estimate bv 


fleur" doubled its estimate by 
selling to the New York trade for 
*2.09 millio n. Seventy eight per 
cent of the lots were sold, realis- 
ing £37.565 million or £20J86^3. 


Dealer Henry Wyndham paid 

£57,200 for the early ‘Norwich. 


Jan Krmgler Gallery: This new gal- 
ley is inaugurated with 60 Cubist 
worts by Picasso from the Marina 
Plcawo Collection with two decades 
of paintinra, drawings, sketch- 
bocks. collages and prints from 
1907 to ljK&Ends Dec 10. 41 E. 
57th. 6th floor. 


Flower Market". 

Yesterday's sale revealed the 
market for. British modem Brit- 
ish pictures weaker than it had 
been in May. Least successful 
were the early plein-air can- 
vases. Mere interest was shown 
in later, more challenging can- 
vases,, with Winifred Nicholson 


The 1987 Dylan 
Thomas Award 


The poet Andrew Motion has 
been awarded the £1,000 Dylan 
Thomas Award for 1987. Admin-> 
istered by the Poetry Society, thes- ■ 
judges were Alan Brownjohn and 
GUSan^bdee. 


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17 


Financial Tiroes Thursday November . 12" 1987 



The extraordinary events of mid - Oc- 
tober dramatically demonstrated just how 
vulnerable paper investments have become. 
This is why financial analysts advise 
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ting a good part of their assets into the \ 
solid security of gold. 

Why gold? Because historically, the 
more paper investments have been called 
into question, the more institutions and 
individuals have turned to gpld. In the long 
term, gold has always proven to be a safe 
and secure investment... 

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coins it is international. Ifou can buy and 
sell gold coins virtually anywhere in the 
world - in complete confidentiality and 
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Australian Nuggets are today’s most 
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gradually building up your personal gold 
reserve at a very attractive average price. 

Ask your bank or broker today. 

Or return the coupon for full information. 


- • l.-f. 'I r- . * 


j Ask yourbank or broker today or write to: 
t GoldCoip Australia 

I Chemin Petite Boissiere n° 44 - 1208 Geneve - Switzerland, 
j Please send me complete information about Australian Nuggets 


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Financial Times Thursday November 12 1987 


FINANCIAL TIMES John MacGre S or tells Bridget Bloom about farming’s tough future 


BRACKEN HOUSE. CANNON STREET LONDON EC4 P4BY 
■fetegrams: Rnantimo. London PS4. letex: 8954871 
Telephone: 01-248 8000 


Thursday November 12 1987 


End of an era 

in aviation 


JOHN MACGREGOR, Britain's 
Minister of Agriculture since last 
July, seems set to make post-war 
history. Earlier this month, he 
announced a scheme to persuade 
farmers to take good land out of 
arable production by planting 
trees on it If this and several 
other pilot schemes in the agri- 
culture ministry's pipeline come 
to fruition, the long expansion of 


British farming, 
with the Dig for Victory cam- 
paigns of the 1940s, will be truly 
and officially at an end. 

Mr MacGregor can see the time 
“not many years ahead” when 
there will be 10 and perhaps 
even 20 per cent less land sown 
to wheat or put to rich grazing 
pasture than there is today. His 

vision of the future still centres 
on an efficient fanning industry, 
but he sees rural jobs and wealth 
being generated not by the farm- 
ers, out by new country-based, 
often high technology industries. 

He is probably the foremost 
ministerial champion in the 
European Community of the 
reform of the Common Agricul- 
tural Policy (CAP), which is at 
the heart of the need for these 
new farm policies. He is himself 
; a sign of the changing tames. The 
first non-farmer for a long time 
to become Minister of Agricul- 
ture and the possessor of a 
sharper mind than many of his 
predecessors, -he describes him- 
self as a free market man, with a 
“passionate belief” in getting 
value for taxpayers’ money. 

Two of his previous jobs since 
1979 were as minister for small 
businesses and Chief Secretary 
to the Treasury. Reportedly 
much admired by Margaret 
Thatcher, the British Prime Min- 
ister, he does not mince words, 
at least about the CAP. It was “a 
massive misuse of resources”, he 
told farmers recently, wanting 
that the alternative to reform 
was a disorderly descent into 
chaos. 


BRITISH AIRWAYS must be 
more than satisfied with the con- 
clusions of the Monopolies and 
Mergers Commission's report on 
its proposed takeover of British 
Caledonian. The commission has 
waved through the merger sub- 
ject only to minor restrictions 
suggested by BA itself during the 
course of the investigation. 

The absorption of BCal into 
BA represents the formal aban- 
donment of a two-decade-old 
commitment to a “second force* 
in British aviation. The UK's flag 
carrier will in future face only 


piecemeal domestic competition 
from an array of small “niche” 
airlines. 

The commission had to tackle 
an extremely complex set of 
issues in a very short space of 
time. Both Lord Young, Trade 
Secretary, and Lord lung, BA 
chairman, went out of their way 
to praise the quality of its analy- 
sis. The facts and figures assem- 
bled are certainly impressive, 


on Load public interest factors 
and showing more than a hint of 
chauvinism, the commission 
comes close to undermining the 
spirit of the Tebbit guidelines 
which suggested that the effect 
of a merger on competition 
should be the prime consider- 
ation. 

Britain’s commitment to a 
“competitive multi -airline indus- 
try” is ostensibly being upheld, 
by the ruling that BA should 
give up a tiny proportion of its 
landing slots at Gat wick and not 
automatically have access to 
eight of BCal’s 37 routes (five 
domestic routes and three snort- 
haul routes in Europe). 


Relative strength 

The idea is that the Civil Avia- 
tion Authority will consider 


applications tor the eight routes 
from both BA and the small 


but the reasoning is not always 
convincing. For example, the 


convincing For example, the 
commission seems over-im- 
pressed by the argument that BA 
needs to grow in order to with- 
stand more intense competition 
from the US “mega-airlines." 

BA is considerably smaller 
than the leading US airlines. 
Texas Air, far example, carries 
five times as many scheduled 
passengers but the vast bulk of 
US airlines' business is in the 
insulated North American home 
market. There is no prospect 
whatever of the largest US air- 
lines being ftee to compete on a 
global bams with the likes of BA. 


Market dominance 

The concentration of the US 
domestic Industry - a depressing 
side-effect of deregulation - is 
thus irrelevant to the BA/BCal 
decision. The only non-US air- 
line with close to BA's market 
power is Japan Airlines; rivals 
such as KLM and Lufthansa are 
much smaller. 

It was also depressing to see 


from both BA and the small 
independent UK airlines, and 
award them on merit. It is far 
from dear what criteria the CAA 
will apply in deciding which air- 
line deserves which route. BA 
has already declared its inten- 
tion to fight for all of the routes 
in question and plans to operate 
them until the CAA readies a 
decision. 

The prospect s for competition 
thus loot fairly bleak. The new 
flag airline will be dominant at 
both Heathrow and Gatwick 
even if it does lose some of the 
eight routes. The small indepen- 
dents will almost certainly be 
forced into a “client* relationship 
with BA. 

Many observers w01 say this is 
regrettable but inevitable: it was 
fust unfortunate that BCal 
lacked commercial viability. The 
truth is rather different. The rel- 
ative strength of BA and BCal is 
a function of their route struc- 


coxne. Now they need to know 
the worst, and for as long ahead 
as possible; so that they can plan 
the future. 

In an Interview last week, Mr 
MacGregor laid out his priorities 
much as he has been laying 
them out for farmers over the 
past few months. First comes 
reform of the CAP. It is here that 
his pragmatism is most apparent. 
In the mid-196Qs Mr MacGregor 
was minister of state under for- 
mer Agriculture Minister Michael 
Jopling and he is only too aware 
of the constraints on trying to 
taring about reform when policy 
is determined not by a cabinet df 
relatively tike-minded compatri- 
ots, but by 12 governments with 
different- traditions and methods 
of fanning,- different require- 
ments, products and politics. 

There are some things that 
Britain can do on its own, but 
not many. Funding research is 
one and running agricultural 
advisory services another. But 
most questions, even down to 
whether Britain may or may not 
increase the moisture content of 
the wheat it sells into interven- 
tion stores, axe determined in 
Brussels, either by m i n isters or 
officials. The experience of long 
nights of negotiation there is 
clearly a sobering one. Mr Mac- 
Gregor reflects that, whereas 
when he was Chief Secretary 


tuxes and airport access, both Of 
which are the of 


the MMC explicitly giving weight 
to factors unrelated to campeti- 


to factors unrelated to competi- 
tion. It recognises that the 
merger will increase BA’s market 
dominance but says this adverse 
consequence must be balanced 
against the risk that BCal would 
otherwise be forced into liquida- 
tion with the consequent Boas of 
thousands of jobs. It does not 
take seriously the possibility that 
BCal could have been taken over 
by a prontame foreign airline 
capable of posing a threat to BA. 


which are the responsibility of 
government If the Government 
had not been so intent on max- 
imising BA's sales proceeds upon 
privatisation it could have 
ensured that BCal had a viable 
route structure. 

It must now live with the con- 


competition means that the Gov- 1 
eminent must push still harder ; 
for liberalisation In European' 
and international markets. 
Secondly, it may need to con-: 
elder significantly stronger pow- 
era for the CAA. The less com- 
petitive a market, the greater the | 
need for effective regulation. 


Concessions 
from Syria 


THE RESULT of the Arab sum- 
mit, which ended in Amman yes- 
terday, is more positive than 
expected, even though some of 
the more exaggerated claims 
about the restoration of Arab 


unity must be taken with the 
usual pinch of salt. 


King Hussein of Jordan had set 
limself the immensely difficult 


himself the immensely difficult 
task of persuading the odd man 
out, Syria, to join the Arab front 
against Iran and to reconcile the 
Damascus and Baghdad regimes. 
Predictably, this objective has 
been attained only partly. How- 
ever, the fact that Syria was pre- 
pared to endorse a statement 
condemning its ally, Iran, for 
occupying Iraqi te rri tor y and for 
failing to implement the United 
Nations Security Council's cease- 
fire call must be considered a 
considerable achievement. 

Given Syria's previous support 
for Iran, the tough and unambig- 
uous wording of the statement is 
as much a surprise as its content. 
It speaks of Iranian “threats, 
provocations and aggression” in 
the Gulf, condemns the “Moody, 
criminal events committed by 
the Iranians in Mecca,” and ra h ** * 
the Tehran government to task 
for its “procrastination* over the 
implementation of the UN cease- 
fire resolution. 

In substance, too, Syria has 
made an unexpected concession. 
It has supported a statement 
urging Iran to accept the UN 


meeting when asked to do sa 
' All these tell-tale signs seem to 
Indicate that it would be prema- 
ture to hail a rupture of toe alli- 
ance between Damascus and 
Tehran and the forging of a new 
partnership between Syria and 
Iraq, particularly in view erf the 
long-standing hostility between 
these two Baathist regimes. 

In endorsing the tough anti- 
Iranian statement. President’ 
Assad appears to have been 
motivated at least as much by 
the desire to ensure continuing 
Arab financial support for his 
ailing economy as by a genuine 
change of heart 


Important sacrifices 

Yet it is dear that, in public at 
least, Damascus has given 
ground to the moderate Arab 
states, thus strengthening the 
body of international opinion in 
favour of the UN-inspired soh*- , 
tion of the Iran-lraq conflict It 
will be interesting to see i 
whether President Assad can, or 


wants to, explain his ostensible 
volte-face to his Iranian allies by 
assuring them that he has not 
given anything away in sub- 
stance in Amman but appear- 
ances are against him and 
appearances count for a great 
deal in the Middle East 
The impression that it Is har- 
dline Syria which has been 
forced to make the most impor- 
tant sacrifices on the altar of 


Security Council Resolution 598 
in full rand in the consequential 
order of its clauses.” That means 
that Syria, in common with the 
other participants at the summit, 
wants Iran to give up its demand 
that Iraq should be declared the 
“aggressor* before agreeing to a 
ceasefire and withdrawing all 
Iranian forces to their own bar- 
den. 


the futures or equity business. 
He compares his starting point to 
his arrival In 1983 as the first 


chief executive of Lloyd’s of Lon- 
don. “The first thing I said to the 
Governor of the Bank of England 


, said to the 


was that 1 didn't know 


regional Arab unity is strength- 
ened by the firmness with which 
the participants expressed their 
support for the Gulf states, in 
particular Kuwait, in their con- 
frontation with Iran, and by the 
passage in the communique on 
Arab ties with Egypt, 

Though Syria was able to 
block Egypt’s formal reodmisaion 
to the Arab League from which 
it was suspended following its' 
1979 peace treaty with Israel, it 
was unable to prevent the sum- 
mit from adopting a specific 
clause permitting individual 
Arab states firm resuming diplo- 
matic relations with Cairo. 

Several Arab countries, Includ- 
ing some of the Gulf states, Iraq 
aria Morocco, have already indi- 


about Lloyd's.” 
Lord Richa 


Tell-tale signs 

However, before starting to 
cheer this apparent return of the 
prodigal son to the pro-Iraqi 
Arab fold, it fa as well to look at 
the things which President Hafez 
al-Assad of Syria has refused to 
do. 

He opposed a call for sanctions 
by the Arab countries in the 
event of Iran's refusal to imple- 
ment the UN cease fire r esolu- 

denied a ^SordaSan cEtim^that 
King Hussein Had managed to 
reconcile the Syrian ana Iraqi 
leaders. Indeed, President Assad 
and President Saddam Hussein 
of Iraq pointedly declined to 
shake hands at the end of the 


Lord Richardson, the then 
Governor who put him up for 
that job, was said this week to 
have been ' among the other 
potential ca n didates for the 
Hong Kong post. 

Davison was still insisting yes- 
terday that his departure from 

Lloyd’s after three stormy years 
was not precipitate, and that he 
had completed hia contract. 

Since then he has publis h ed a 
book drawn from his time as the 
insurance market’s trouble 
shooter, has collected director- 
ships . ranging from Midland 
Bank to the Independent news- 
paper, and only last week was 
lecturing fellow accountants on 
the need for unity in an age of 


cased that they intend to take 
such a step, which can only be 
welcomed b : " 


welcomed by the rest of the 
world. Egypt's re-emergence as 
an influential voice in the 
region's affairs should not only 
hdp the search for a solution to 
the Arab- Israeli conflict but 
would substantially strengthen 


He clearly relishes his latest 
as si g n me n t. “In terms of num- 
bers there is no question that the 
Hong Kong Stock Exchange is a 


the more moderate, pro-Westera 
forces within the Arab warkL 


would regard the vigour and 
strength of the HKSE as critical 
to the development of Hong 
fcmganci to the developing role, 



; ll: 

• - 



. **r?.*>W ... ,, ■ 







Harvest 


of home 


It is a long time since farmers 
have heard quite such blunt 
words. Not surprisingly, they are 
reeling a little. Yet at the same 
time, perhaps because Mr Mac- 
Gregor's reforming seal fa tem- 
pered by pragmatism and 
clothed in a mild manner, farm- 
ers have given the new minister 
a reasonable welcome so for. It 
may also be because, as he says 
himself, formers have known for 
some time that changes must 


truths 


“we’d take a lot of decisions dur- 
ing the day. often involving hun- 
dreds of millions of pounds, after 


a long day in the Agriculture 
Council, eventually when you 


get to bed you realise you 
haven't achieved anything.” 


haven't achieved anything.” 

However, he thinks that 
reform of the CAP is achievable, 
at least as defined by himself, 
the European Commission ana 
so far only a very small minority 
of other member states. He 
denies that what is intended will 
do little more than nibble at the 
edges of the problem and he 
maintains too that the break-up 
of the CAP Is neither practical 
nor desirable. 

His starting point for reform of 
the CAP from within Is'to cor- 
rect the “massive misuse of 
resources”. It is easy enough to 
see how fanners have responded 
to the twin stimuli of high prices 
and new tec hn ology to increase 


industry. “That Is surely misus- 
ing resources.” 

Britain now wholeheartedly 
backs the Commission in its 
plans to introduce so-called bud- 
get stabilisers to curb spending 
on surplus commodities. Mr Mac- 
Gregor believes these are the key 


production, but now supply must 
be got back into balance with 


be got back into balance with 
demand. “We spend more than 
half the farm budget, or £12.5bn 
a year, on storing commodities 
no one wants and subsidising 
them for export, where they 
skew world markets, especially 
for developing countries," he 


says. Agriculture gets 17 times 
mare public aid in r el a t i on to its 


surpluses have got to be tackled 
and he claims that several minis- 
ters, including the French, are 
now nearer to Britain’s view. 

True or not, the British flag is 
in any case firmly tied to the 


mare public su m rel a tion to its 
contribution to gross domwestic 
product than manufacturing 


m any case 


Hong Kong post 
for Hay Davison 

Ian Hay Davison, purveyor of 
regulatory structures to a some- 
times reluctant financial commu- 
nity, spent last weekend in Hang 
Kong on “a very modi incognito 
visit?* Hfa return a week later is 
likely to be rather more high- 
profile as he starts a six-month 
stint as chairman of the govorv- 
menfs newly constituted securi- 
ties Review Committee. 

Piers Jacobs, the territory's 
financial secretary, told the legis- 
lative council there yesterday 


Men and Matters 


Lative council there yesterday 
that the committee was 
“intended to draw lessons from 
recent events in the stock and 
futures markets and, as for as' 
possible, ensure that those 
events do not happen again.' 
Davison, aged 66, was appointed 
because of his “great relevant 
knowledge and experience.” 

Davison himself, though, dis- 
claims any special knowledge of 
the futures or equity business. 


Although be may find the odd 
typhoon blowing his way from 
the small local brokers which 
hold sway on the exchange 


Touring India, the bank’s Wg- 
*st customer, with his wire 


gest customer, with his 
Charlotte, he has been greeting 
guests at receptions in an expen- 
sive, glad-handing mood: “Hello, 
we are Conables." 

But when he tried this bonho- 
mie at Mother Teresa's Mission- 
aries of Charity home for the 
dest itu t e in poverty-stricken Cal- 
cutta, and asked whether there 
was anything the World Bank 
could do, Mother Teresa floored 


council, he fa happy to confess: 
“Frankly it’s a great place to 


spend the winter. 


Newman’s law 


Sr Kenneth Newman, the for- 
mer Metropolitan police commis- 
sioner, has broken with the tra- 
dition beloved of so many senior 


Teresa floored 


both Conables with her reply: T 
don’t know what the world 


policemen, that they retire to 
comfortable billets as security 
advisers to industry or govern- 
ment departments. 

Newman, who has a law 
degree, has chosen the academi c 
life Instead. He has just been 
appointed a professor at Bristol 
University. 

He will deliver public lectures, 
and lecture to students in crimi- 
nology, law, and the English 

legal system. 

Newman, who gained hfa law 
degree through part-time study, 
win work in dose cooperation 
with the univosfty’s researchers 
In policing mattersJHe explains 
that he gained hfa external law 
degree from London University ' 
in 1972, mostly working on hfa ; 
own initiative, out also attending 
some night classes. 

He retired from the police ear- : 
Her this year after five years as 
the Metropolitan Commissioner, 
an appointment which con- 
cluded a disti n g uish ed policing 
career of mare wan 40 years. He 
was formerly head of the RUG. 


don’t know what the 
Bank is.” 


Swiss role 


This fa a week in which the 
|flobrii<atic mjtfjte cap rita^mar- 

flavour. 

Rudolf Mueller, was nut in 
charge of Union Bank of switeer- 
landa UK operations, a idle hi 
which he will assume direct con- 


trol of stockbrokers, Phillips A 
Drew. Any lingering ideas that P 


Drew. Any lingering ideas i 
& D might retain its Indepen- 
dence under the UBS umbrella 
were dispelled. 

Yesterday, however, a rare 
foothold was gained in Switzer- 
land. Andrew Large, a 46-year- 
old Winchester and Cambridge 
educated Briton, was appointed 
to the board of Swiss Bank Cor- 
poration. He will be the only for- 
eigner on the bank’s board, and 
will effectively be ddef execu- 
tive of its investment banking 
activities around the world. As 
the head of Swiss Bank Corpora- 
tion International in London, be 
already held much of this 
responsibility. But now he wSl 


Conables floored 


Maybe Barber ConaUe, presi- 
dent of the World Bank, should 
turn his attention to hfa bank’s 
third world image now he has 
carried out hia controversial 
manag em en t 


be moving to Zurich and 
on, in addition, SBC’s capital 
markets activities in Switzerland 
itself. 

The appointment means that 
two of the big three Swiss banks 
will have foreigners in promi- 
nent roles in the Swiss mark^ 


stabiliser mast, since Mrs 
Thatcher made it clear at last 
June's EC summit that unless 
member states sign up to “pre- 
cise methods, mechanisms and 
figures for each commodity', 
Britain will not agree at the 
Copenhagen summit in a 
month’s time to new arrange-^ 
ments for the Community's 
future financing. 

Mr MacGregor to adamant that 
this still remains the case as he 
prepares for next week’s Agricul- 
tural Councfl, due to see the start 
of real negotiations on stabilis- 
es He leaves only me tiny hos- 
tage.to fortune -when he says 
that London has not yet ‘abso- 
lutely staked out Its irreducible 

minimum” In terms- of which 
commodities have to be 
included. 



Nicholas Kaldor 


For Mr MacGregor, getting 
“real budgetary discipline* into 
rim GAP, as well as a balance 
between supply and demand, -is 
the essential basis for new poli- 
cies on the rural economy at 


home. All the schemes being 
concocted in the Ministry of 
Agriculture and the Department 
of the Environment predate his 
tenure by a few months, having 
been part of the so-called Alure 


(Alternative Land Use and the 
Rural Economy) package in the 
spring. The new minister has, 
however, endorsed them fully. 
Not, he stresses, as a panacea - 
“they can’t be panaceas, for 
there are none possible” - but 
more as ‘measures to help 
adjustment in rural commun i- 


campaigner and espouser of 
causes, ne “had no equals among 
his contemporaries/ Historians 
wOl be bard pressed to find a 
“more lucid or pungent single 
commentary on contemporary 
economic problems.' 

In a fulsome preface. Sir Doug- 
las Wass, a former Treasury 
mandarin, says Kaldor was one 
of the “two or three real 
geniuses* he had the good for- 
tune to meet and expresses baf- 
flement at his failure to win the 
Nobel Prize. 


The schemes range from 
grants for planting broad-leaved 
and other trees on arable land, to 
help for the establishment of 
farm-based industries. Details 
will be announced over the next 
few months. In addition, more 
so-called environmentally sensi- 
tive areas will be created in 
areas of special beauty, like the 
South Downs, which will encour- 
age less intensive, more oooser- 
vation-consdous forming. • 

Mr MacGregor acknowledges 
that the results of CAP reform, 
in particular, will mean that 
more people will leave the land 
and that, despite the new 
schemes, me will be more diffi- 
cult for many of those who 
remain. But hie fits this rather 
rough message into a smoother, 
more hopeful vision of the 
future, for which he draws to 
some extent on his experience as 
MP for the rural constituency of 
South Norfolk- 

The countryside must changp, 
as It always has, to live: Fanners 
will still be important producers 
of food. But if the butcher, rite 
baker and blacksmith of old 


to reform, though he they 

are rather less than the rash hm- 


are rather less than the raah lim- 
its in which he is “a strong 


have gone from the villages, 
good or improving transport and 


believer”. But he does think they 
can produce “real budget disra- 


can produce “real budget disci- 
pline*. 

The baric principle erf the sta- 
biliser is that price and/or pro- 
duction nailing* are set for each 
commodity. If these are 
exceeded, there win be “an auto- 
matic . in-built mechanism* 
which will trigger off price cuts 
or other penalties. -The idea has 
found' little favour outside 
Britain and the Netherlands so 
far, partly because it means giv- 
ing more power to CammfasiGtt 
officials. But Mr MacGregor 
maintains that the atmosphere 
of ‘pork barrel” bargaining 
between agriculture ministers erf 
only a very few years ago has 
“totally changed*. 

Everyone now accepts that the 


communications are beginning 
to mean that non-agri cultural, 
often high-tech or information- 
based industries can come in. 
These could be the “wealth gen- 
erators and employment creators 
of the future - rite challenge, 
being to get balanced growth, 
with their help, without destzpy- 


plays that role. 

Raider's greatest talent was in 
persuading politicians and. 
bureaucrats that he could help 
them. It fa doubtful whether any 
ecUnortOgfr (Keynes indnded) has 
ever held -so many advisory posi- 
tions. Quite apart from his role 
as senior tutor at the UK Trea- 
sury, Kaldor . found time to lec- 
ture a bewildering variety of 
Third World governments. He 
was an official adviser to India, 


Balance is something that mat- 
ters to Mr MacGregor, but so too 
does the encouragement of entre- 
preneurship. He does not like 
direction by. government, even 
though he accepts that he can be 
less than a free marketeer in 
agriculture, with its tradition of 
protection and now its gover- 
nance by the GAP. But, he says. 


the whole purpose of his policy 
Is to 'give people incentives ana 
to take them sensitively through 
the period of change, but to 
make it their decisions which, 
matter.” • 

Maybe that se nsitivity fa what 
has won him a good ride with 
the farmers • so far. •' 


Sri Lanka, Mexico, Ghana, Guy- 
I ana, Turkey, Venezuela and Iran. 

I From time to time, Hungary, 
France and various UN commit- 
tees also came in for a spot of 
instruction. Such an itinerary 
puts even Henry Kisringer in the 
shade as a globe-trotter. 

However, the practicability of 
much of this constant stream of 


as writ as internationally. Hans- 
Joerg Rudloff of Credit Suisse 
FirstBostan, a West German and 
another senior figure in the 
Euromarkets, was last year 
appointed to the board of Credit 
Suisse and has since been trying 

and carteSaad Swiss boai^mS- 
ket Large will not be drawn into 


The rapid growth of S8& fa 
undoubtedly the reason for 
Largs’s elevation. In 1980, he 
was one of five executives to 
leave Orion Bank to found SBCI, 
and it has since developed into a 
force in the Euromarkets, 
employing 400 people now com- 
pared with just 50 fat 1986: It was 
one of the first houses to recog- 
nize the potential importance of 
rite International equity business 
and has developed that rapidly 
in London and Tokyo - a strategy 
not dented by the stock market 
crash. His departure for Zurich 
robs the London capital markets 
of a powerful ana articulate 
spokesman. As chairman of the 
Securities As s o ciatio n , Large trod 
a fine line: on the one hand 
attempting to alert and prepare 
the capital markets for regula- 
tion under the Financial Services 
Act, and on the other champion- 
ing their case against over-regu- 
lation in a number of important 
arguments. Most recently, he 
wan a lobbying battle to have 
impleme ntation of a key clause 
in the Act delayed. He has main- 
tained strongly that practituKiers 
should help to fas h ion the rules 
as regulators. But in the end, hfa 
very prowess as a practitioner 
has barred him from carrying on 
hfa regulatory rale. 


Well tried 


Louis GugUemi, of Baltimore, 
appealing against his conviction 
for interstate transportation of 
obscene films, argued before the 
US court of appeals that the 
materials wots “so disgusting 
and repellent that they could not 
be found to appeal to the pruri- 
ent interest of the average per- 
son," and hence were pro te cted 
by the First Amendment. 

Not without ingenuity, said 
the senior circuit judge. But con- 
viction affirmed. 


advice fa open to question. Kal. 

dor. for example, *2* ea ^ r 

and early exponent of an expen- ; 
dlture" or 'consumed income J 
tax. (His ideas were recycled and 
popularised two decades later by k 
the Meade Committee on tax f 
reform). Yet, in spite of decades 
of advocacy, no country has ever 
shifted from the taxation of 
income to the direct taxation of 
personal consumption. The wen- 
meal and political difficulties 
associated with such a transition 


are simply too great to be con 
templateo even in advanced 
countries. 

In UK tax circles, Kaldor is 
perhaps best remembered for 
another blind alley: the Selective 
Employment Tax introduced in 
September 1966. Kaldor was 
always convinced that manufac- 
turing industry was “special": the 
SET was tailored to his preju- 
dices. It represented a tax on ser- 


By Anthony P. Thirl wall 

Wheaisheaf Books; £55 


PROFESSOR Thirlwall, a 
well-known Keynesian econo- 
mist, is hardly an objective biog- 
rapher of Lord Kaldor. At times, 
he seems almost overcome with 
admiration for his subject The 
Hungarian-born economist, he 
declares in the very first sen- 
tence, was one of the ‘most pro- 
found and influential economic 
thinkers of the 20th century.” 

He was a “unique figure," who 
was “devastating in debate," and 
who “led worldwide” the Intellec- 
tual assault on monetarism. As a 


Kaldor was certainly a versa- 
tile and creative economist, but 
he does not deserve Idolatry. To 


put the reverse point of view at 
us bluntest, it could be argued 
that many of his theoretical sal- 
lies were up blind allies, while 
his copious advice to Labour gov- 
ernments in the 1960s and 1970s 
did nothing to stem Britain's rel- 
ative decline and, indeed, may 
well have speeded it. Hfa greatest 
service may have been as a tire- 
less contributor to The Times 
letters page. IBs only failing as a 
correspondent was to write 
tediously often on the same sub- 
ject 

Kaldor was frequently spectac- 
ularly wrong. His attitude 
towards the European Common 
Market is a case in point. He 
fired off “all the intellectual 
ammunition he could muster” 
against the common-sense argu- 
ment that the UK would derive 


Kaldor’s greatest 
talent was 
in persuading 
politicians and 
bureaucrats that 
he could help them 


dynamic gains from entry to a 
larger market and even made the 
claim, absurd in retrospect, that 
Britain - would become the 
“Northern Ireland of Europe.” 
Northern. Ireland, of course, still 


bridge as a leading centre for 
economic research and teaching. 

. In Ids dedining years, Kaldor 
claimed a new mantle: that of 
the “scourge* of monetarism. He 
delighted His acolytes with hec- 
toring pamphlets, such as The 
Economic Consequences of Mrs 
Thatcher. He strenuously 
attacked Milton Friedman's sil- 
lier assertions, ridiculing the idea 
that there was a reliable, causal 
link between inflation and the 
previous growth of some arbi- 
trary measure of {he money sup- 
pi* *■■■* ■ 

Kaldor, of -comae, has beeh 
proved tight Bar the victory fa 
only partial The vehemence of 
his critique- of Friedman proba- 
bly disguised his own belated 
realisation that British Keynes- 
ianism was indeed flawed. The 
fine print of monetarism was full 
of. errors, but Friedman's mes- 
sage that “money matters* was 
timely. Kaldor and his friends, 
struggling to formulate a more 
credible theoretical framework 
than neoclassical economics, 
concentrated too much on the 
“real” economy and too little on 
monetary and financial factors. 


Michael Prowse 


'West Side Stoi 


THE STORY SO FAIL. Bailey Posner & Partners 
acquired by Baker Harris Saunders creating 
Bailey Posner Hood THE NEXT INSTALMENT- 
A combined personal and professional service for all 
commercial property 
matters in London. 



vice industries and a subsidy for 
manufacturing. The blurred line 
between the two sectors gave 
rise to constant anomalies and 
the tax was extremely unpopu- 
lar. It was scrapped in the early - 
1979s when value-added tax was 
introduced. 

Apart from his role as a global 

economic adviser, from 1949 to -> 
1976, Kaldor was successively a 
lecturer, reader and professor of 
economics at Cambridge. Togeth- 
er with Joan Robinson, he 
fought a long campaign against 
the post-wax resurgence of classi- 
cal economics. He helped estab- 
lish a “neo-Keynesian” school 
which faced up to the inconve- 
nient fact that most of the 
assumptions of “neoclassical” 
economics do not hold good In 
the real world. The intellectual 
honesty of Kaldor and other 
Cambridge economists was admi- 
rable, but they were not able to 
buck a worldwide trend towards 
idealised and highly conservative 
economics. The price of their 
refusal to compromise or peddle 
ideas they knew to be fallacious 
was the gradual eclipse of Cara- 


SAUNDERS 


Observer] 01-6294640 to be continued- 01-7262711 


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Financial Times Thursday November 12 1987 


19 


US FEDERAL BUDGET DEFICIT 


Percentage of GNP 



1976 78 . 80 82 84 86 88 90 

Bounac Congw uta t M t Budget OHci •' 


Economic Viewpoint 

Beware the 

coming of 
the false dawn 

By Samuel Brittan 


US BOND & EQUITY YIELDS 


per annum 


15% 



HISTORY never repeats itself. 

Those who have examined the 
events following the 1929 Wall 
Street crash point out that there 
waa a rally in early 1930, which 
made up most of the lost ground, 
followed ' 


% 


by much 
quent falls in the 
which did not hit bottom uni 
1932. The recession in output, 
which had started in . 1929, 
became a slump in 1930-32 and it 
was then, too, that the banking 
collapse and the most cata- 
strophic of the fails in commod- 
prices occurred. 

It is indeed likely that the 
worst threat of any future slump 
will come between 1988 and 1991 
and that before then there will 
be a false dawn, perhaps associ- 
ated with a US budgetary agree- 
ment and another Group of 
Seven understanding on 
exchange rates. 

But the nature of the subse- 
quent problems is likely to be 
different this time. In the eady 
1930s, all the pressures were 
downward on output and prices 
alike. There was no need to coin 
ugly words like stagflation. 
Deflation was an all too accurate 
description. 

This time round, it Is dear that 
political leaders and central 
bankers, especially in the 
English-speaking countries, are 
determined to avoid the defla- 
tionary errors of the 1930s. 
Promises of sufficient “liquidity* 
(whatever that means) are being 
made all . round; and mere is no 
danger of the US Federal 
Reserve or Bank of England fail- 
ing to bell out banking Institu- 
tions. Rather the opposite. 

The danger is that s y mptoms 
of inflation will start reappear- 
ing during the false dawn, espe- 
dally, but not only, in the US 
and UK in response to the pres- 
ent loosening of polity. 

Policy makers will then not 
know whether to fight Inflation 
or recession. An upward drift In 
bond yields or fresh currency 
pressures will, at some stage, 
impel national authorities on to 
a more restrictive, tack. Then we 
could have the real dump. 

But because of the threat of 


i and wage inflation - real or 
‘ - policy makers will 
hesitate to reverse course once 
again in the direction of all-out 
monetary or fiscal stimulation. 
Indeed,- u some, national authori- 
ties try to do this, the financial 
and even the labour markets 
may quickly, give the thumbs 
down signal. 

The extremely low rates of. 
inflation recorded in 1906 proved 
a temporary aberration associ- 
ated with the fall In oil and com- 
modity prices. Average world 
inflation rates were at 3 to 4 per 
cent when the 1987 equity crash 
occurred; and in the US the 
underlying inflation rate was 4 
to 5 per cent and tending 
upwards. One trigger for the 
Wall Street equity tumble 
the rise in both bond yields and 
short-term Interest rates, which 
in turn reflected Inflationary 
fears. . . 

There fs nothing mysterious 
about having to fight slump and 
inflation at the same time. The 
horrible word stagflation waa 
coined in the 1970s to describe 
the combination of high infla- 
tion and high unemployment 
which has plagued the world 
ever since. 

In the 1970s and early 1960s, 
there was much talk about the 
economic contradictions of 
democracy and in particular the 
incompatible claims pursued by 
rival interest groups both 
through monopolistic action in 
the market (examples are the 
Organisation of Petroleum 
Exporting Countries' cartel and 
the unions' wage push) and 
through the political systexn. 

These tensions have not been 
exorcised by movements 
as Reaganism and Thatch- 
erism; and they show themselves 
In the pursuit of objectives 
which are incompatible with rea- 
sonable price stability and probar 


tinuing US insistence on growth 
at all costs - with no toleration of 
even a quarter's pause while' the 
external and internal imbalances 
are being corrected - is an exam- 
ple of the ex c ess i ve 
thrown up by political comj 
Cion for < 


Crash not due to 
budget deficit 

THE MOKE one examines 

the evidence, the non dubi- 
ous the proposition that the 
US budget deficit was the 
cause - either proximate or 
ulti m ate - of the Wall Street 
crash. On this Milton Fried- 
mad Paul Craig Roberts 
(who wrote on thh pa 
terfmy) are right. The 
deficit was, at most, 


deficit for West Germany waa 
projected to riae to 2 per cent - 
next year, thus creeping np 
on the heels of the US. 

That is not alL -The last 
piece of fiscal news before 
the crash was that President 
Xeagaa had reluctantly 
accepted - the Congressional 
Budget Resolution, Including 
the revised Granun-Endnuui 
provision for automatic 
•pending cuts. These would - 
on the basis of no rmal eco- 
nomic growth - reduce the 
’deficit to $140bn In IMS and 
to S108bn in 1090; This is 
equivalent to &A and 2 per 
cent of GNP respe c tively. 

The current White Homse 
n e gotia ti ons may add only a 
little to the Graunm-ttudman 
cuts. Yet, even so, the deficit 
to GNP ratio is on a sharply 


the about-turn under 
US Treasury Secretary James 
Baker, from benign neglect of 
the trade deficit to frene tic con- 
cern, was testimony to the influ- 
ence of oil, ‘agricultural and 
other exporting lobbies. The oon- 


unbelpfol background factor. 

The Federal bssfiget . deficit 
reached Its peak at 02201m In 
cash terms In 1986. Its tram 
peak, however, came in 1963 
shea It reached 6J per cent 
Of gross national product 
In the fiscal year 1987, 
ended in September 
before the equity crash, the 
fallen sharply In 
cash trams as well to >148tm, 
3w4 per cent of GNP. The Con- 
gressional Budget Office bas- 
eline projection 
that there were 
fnr all f act ora 
that the deficit would eHmh 
to 6180ba in 1988, stfll lower 
then it was fat 1976, the last 
year of President Gerald 
xord. 

These Federal numbers 
exclude the surpluses of state 
and local authorities. Projec- 
tions by the Organisation for 
Economic Co-operation und 
Development (OECD) of the 
general government balance 
(not cyclically adjusted or 
otherwise doctored), which 
Cake In those subordinate 
units, showed the US deficit 
In both 1987 and 1988 at 2j6 
per cent of GNP or a decimal 
lint below the Group of 
average. Indeed the 


failing trend. 
If the 


point 

Seven 


deficit did not precip- 
itate the crash, what did? The 
clearest candidate is the 
rapid widening of the gap 
between bond and equity 
yields. When the gap had 
reached comparable levels in 
earlier periods, it had been 
narrowed by full it g bond 
yields. This time, however, 
bond yields bad been sharply 
rising, thus putting all the 
strain of adjustment on 
equity yields, which are, of 
coarse, the reciprocal of 
equity prices. ' 

What did help to trigger the 
crash was S ec re ta ry Baker's 
policy of playing chicken: at 
some times going all out foe 
stable exchange rates and at 
other times seeming actively 
to encourage dollar devalua- 
tion. If the market is already, 
vulnerable on yield consider- 
efau and the Treasury Sec- 
retary threatens to abandon 
an accord which the Mw—ai 
public had crane to regard as 
a co r n er s to ne of policy, yon 
should expect trouble. 

The US Budget deficit dees 
matter, but in the co ntext of 
an extremely low national 
savUigs ratio and not as a 
form of original sin. Because 
of a high savings ratio, Italy 


has avoided major external 
deficits despite a gov e rnment 
borrowing to GNP ratio, as 
normally measured, st five 
times the US level. In Den- 
mark, on the other hand, a big 
reduction In the budget defi- 
cit has been oflhet by a fell in 
private sector savings and the 
country is still troubled by 
excess i ve extern a l bo r r owin g. 

- Although the US budget 
deficit did not start the stock 
market crash, the Washington 
fiscal talks have . assumed 
aymbolic Importance. Their 
outcome is thus likely to be 
critical for financial confi- 
dence, if only because current 
attitudes have made them so. 

The balanced budget la a 
useful myth; but the last time 
we want to resurrect it is 
when the world is faced with 
a one-in-three chance of a 
major recession, bordering on 
slump. 

In the UK, the Chancellor’s 
public sector borrowing 
req uir e m ent caning of 1 per 
cent of GNP, or £4bn to ifilm 
per annum, gives him ade- 
quate room for manoeuvre 
when the PSBR is likely to 
tarn out at Clba But his rule 
of thumb would be hi g hl y per- 
nicious in a slump, when it 
would suggest tax increases 
or expenditure cuts which 
would make matters worse, as 
happened in the 1980s. The 
special British circumstances 
of 1981, when there was a 
need to reduce the structural 
deficit, do not provide a 
model for other occasions or 
other countries. 


exchange rates, but the rate of 
price increase for internationally 
traded goods. 

Output per head in UK manu- 
facturing, which is a good guide 
to the traded sector, is rising in 
Britain at somewhere between 4 
and 7 per cent per annum, a 
good deal faster than in Ger- 
many. This is largely because UK 
productivity levels have been 
catching up. But while this is 
occurring, British manufacturers 
can absorb larger pay increases 


CONSUMER 

PRICES 

Increase % p-a. 

1963-70 

Japan 

5.5 

Italy 

4.0 

UK 

3.8 

France 

3.8 

US 

2.8 

West Germany 

2.5 

Souna: LBS 


Sterling, inflation 
and the D-Mark 

LET ME, however, come to the 
Chancellor’s support on another 
issue. 

How can sterling remain stable 
against the D-Mark, when UK 
inflation hovers around 4 to 4V4 
per cent, compared with about 1 
per cent in Germany? 

It is not the general -rate of 
inflation which matters for 


than German ones without rais- 
ing prices. 

The other tide to this is that 
an exchange rate link with a low 
or zero inflation country will not 
eliminate inflation if productiv- 
ity is rising more slowly in the 
sheltered domestic sector. An 
extreme example is Japan in the 
heyday of its 1960s growth. Rap- 
idly rising manufacturing pro- 
ductivity enabled it to stay com- 
petitive internationally, even 
while the prices of other goods 
and services were, as the small 
table shows, pushing Japan to 
the top of the inflation league. 

Stability in the prices of inter- 
nationally traded products is 
most that can reasonably be 
expected from an exchange rate 
anchor. As there is a limit to the 
extent that productivity and 
price trends in the two sectors 
can diverge - usually much less 
than in the Japan of the 1960s - 
a sterling- D-Mark link is an ade- 
quate safeguard against a UK 
inflationary take-off But neither 
it, nor any practical alternative, 
can provide a literally zero rate 
of increase in the retail prices 
index, which is, in any case, not 
a sensible definition of price sta- 
bility. 


JOEROGAL Y 

What is a 
terrorist? 


THOSE of us who reject the Brit- 
ish Prime Minister’s recent de- 
nunciation of the African Na- 
tional Congress as a “terrorist 
organisation' should feel obliged 
to think the whole matter 
through once more, particularly 
in this week of atrocious terror 
In Northern Ireland. For Mrs 
Thatcher, some of whose closest 
colleagues have been killed or 
maimed by the IRA, can reason- 
ably assert that she knows what 
she is talking about She has 
placed herself in great danger 
more than once. She has had at 
least one extremely narrow es- 
cape. It is necessary for her to be 
protected by tighter securi 
-.than would nave been 
20 


security 

Imagined 


not dismiss her 
opinion as simplistic, although 
there is indeed a simple truth 
behind it. A bomb in a crowded 
place is a random means of de- 
struction. Urban guerrilla war- 
fare, to give It a semi-respectable 
name, can be equally destructive’ 
of life whoever the perpetrator 
be. To the victim there is 
distinction between a bomb 
planted by the IRA, the ANC, or, 
say, the Palestine Liberation Or- 
ganisation. 

Thus, those who would ask 
Mrs Thatcher to think again 
about her opinion of the ANC 
must be careful about their logic. 
For many years the “military 
wing* of the South African black 
Ition confined itself to at- 
on what it regarded as eco- 
nomic targets. Its relatively inef- 
fective forces tied dynamite to a 
power pylon here, a railway 
sleeper there. No one was hurt, 
and no great damage was done. 
In recent yean attacks on police 
stations nave produced casual- 
ties, although on nothing like 
the scale of Northern Ireland. 
During the disturbances of 1965 
some of the township hotheads 
invented the ghastly “necklace," 
a burning rubber tyre, as a 
means of executing black Quis- 
the ANC has sought to dis- 
itself from the practice. 
Beyond that, it remains true that 
some bombs have been placed in 
crowded streets and that there 
have been innocent victims. The 
ANC policy oT stepping up its 
‘armed struggle,* recently re-af- 
firmed by its President, Mr Oli- 
ver Tambo, will, if applied to 
South Africa's cities, inevitably 
result in further civilian deaths. 


Why, then, quarrel with the 
‘Prime Minister’s definition? The 
answer is political. The IRA is 
able to pursue its policies 
through the ballot box. The ANC 
is not. Blacks in Smith Africa 
have no say In the government 
of their country; many of those 
who express opposition by 
means short of violence are im- 
prisoned and some are beaten or 
tortured. Mr Botha’s republic is 
overwhelmingly the dominant 
military power in Africa south of 
the Sahara and ft has repeatedly 
shown itself willing to use that 
power, even against unarmed 
demonstrators. 

To an educated black South 
African the situation is at least 
'as frustrating as the equivalent 
is to, say, an anti-Soviet Afghan 
rebel. Yet the Mujaheddin are 
not described by the British Gov- 
ernment as terrorists; nor are the 
Contras in Nicaragua. If either of 
the latter were to resort to the 
deliberate use of urban terror 
they might properly be con- 
demned for their tactics, but 
their us© of arms would, as a 
general principle, be accepted by 
both the Foreign Office ana 
Downing Street as a means of 
standing up to tyranny. (Opinion 
in the West is more divided 
about Nicaragua than Afghanis- 
tan, but that is another matter). 

There is room for debate about 
the best way of ending apart- 
heid. Economic growth, Mrs 
Thatcher's panacea, has not in 
this century shown any sign of 
enfranchising blacks, even if pe- 
ripherals like job discrimination 
have begun to wither away. Nei- 
ther the gun nor sanctions are 
likely to work in the short term: 
Pretoria is too powerful for that 
But even If the conflict will be 
long, blacks have to try. If you or 
I were a black South African 
might we not be strong ANC sup- 
porters? (I like to think that the 
Prime Minister, with her love of 
liberty, would be among the 
leaders - another Winnie Mande- 
la). The conclusion I draw is 
that, sincere as Mrs Thatcher's 
loathing of terrorism may be, the 
decisive factor in her reasoning 
Is her political opposition to the 
ANC. She would argue that this 
does not equate with support for 
President Botha's government, 
but to many South African 
blacks, as to me, it amounts to 
much the same thing. 


Hyperbole and 
the motorways 

From The DirectorOmeral 
of the CBT 

1 read with interest Malcolm 
Rutherford's reaction (Politics 
Today, November 6) to my 
remark at the CBI Conference 
that West Germany had built 750 
more miles of motorway than 
the UK over the last eight years. 
He implied that I was guilty of 
hyperbole, “anyone remotely 
alert must have noticed- by now 
that the British road system is 
no longer all that bad...* 

It may not be ail that bad; but 
it is by no means good enough. 
The purpose of my remark was 
simultaneously to warn against 
the danger of complacency and 
to illustrate the benefits to soci- 
ety at large of a strong manufac- 
turing base. Mr Rutherford's 
comments confirm that the dan- 
ger at least is real. 

So are the ben efits of an inter - 
nationally competitive motorway 
network. As any exporter 
through our growing East and 
South Coast ports will attest, the 
existing motorway network is far 
too limited (and many residents 
of Hampshire, Somerset and East 
Anglia whose peace is being dis- 
turbed by lomes, day and night, 
wUl be happy w agree). Delays 
and congestion on the major 
motorways are endemic There is 
*idH no motorway west of Exeter 
or linking North and South 
Wales or along the South Coast - 
a problem that wffl become even 
more serious once the Channel 
Tunnel is completed. 

For th© record, the latest infor- 
mation shows that West Ger- 
many has almost three times as 
many kilometres of motorway as 
Britain; while we have nearly 
twice as many vehicles per kilo- 
metre of motorway and main 
roads. Although West Germany 
has long possessed the most 
extensive motorway network in 
Europe, remarkably it continues 
to build some 109 more miles of 
motorway every year than we 
do. Meanwhile, we sit in traffic 
jams, complaining of hyperbole. 

Although the British motor- 
way system is undoubtedly very 
much better than it was some 
years ago, it is far from interna- 
tionally competitive. Uncomfort- 
able facts and hyperbole should 
not be confused. 

John ML M. Banhmm. . 
Confederation of British 

JOS New Oaford Street, WC1 


Executive option 

schemes 

From Mr Peter Brown 
Sir, The recent collapse m eq- 
uity prices three years to the day 
after many Executive Option 
Schemes were introduced has in- 
dicated the fragile quality of the 
option as opposed to cash incen- 
tive schemes- 


Letters to illie l&tftor 


Many option holding execu- 
tives who were, four weeks ago, 
looking forward to sizeable en- 
cashment benefits are now nam- 
ing either currently useless op- 
tion certificates or ones -that 
have to be carefully placed as 
share prices see-saw by 10 pa 
cent over 48 hours. 

Whilst there is no Inland Rev- 
enue problem in sacrificing op- 
tions and having them reissued 
at current striking prices, thus of 
course delaying first encashment 
rights for a further three yean, 
the Investor Protection Conuuitr 
tee appears to be unsympathetic 
to such a scheme. 

As executive options offered a 
“no loss' opportunity to holders, 
we can quite understand the 
feeling of institutional and other 
investors nursing equity losses 
not Buffered by the option hold- 
ing executives, but Mocking op- 
tion reissue schemes may be a 
mistake if the markets stabilise 
around today’s levels. 

There are two likely problems. 
Firstly, option holders may be- 
come demotivated by options 
with currenlty worthless striking 
prices and secondly new execu- 
tive recruits with options at 
striking prices 50 per cent lower 
that longer serving employees 
may find themselves the object 
of some jealously when it Is es- 
sential for the management to 


The Reward 
9 Savoy Street , 


More jobs 
tor temps 

From The Chairman, 

Blue Arrow Employment 

Sir, Tour report of the lOD's 
survey’. on . temporary staff 
(November 4) did not bear out 
its headline (Temporary Staff 
Too Costly Say Employers), nor 
the facts uncovered by other 
researchers - and by Blue Arrow 
through its own experience and 
research. • ■ 

* Surely the most interesting 
finding is that a. foil half of the 
companies surveyed are now 
using temporary or part-time 
staff. As the IOD pointed out 
“Many firms would uhe to make 
greater use of contract labour 
because of the' lower coat and 
more flexible employment condi- 
tions.” 

The IMS recently estimated 
that there are 1.75m temporary 
workers in the UK 'asd that their 
number Is growing. The LRD( 
survey In 1987 reports a 58 
cent increase in white cc 
temporaries since 1980. The tide 
towards a flexible work f orce kj 
now flowing strongly- 

This move towards a “core" 
group of employees, supplement- 


ed by temporary staff when 
needed, is being increasingly 
viewed as a vital precondition to 
stable employment. Certainly 
more can and should be done to 
the bureaucratic bonds 
ing thh tr en d; the IOD 
survey showed high levels of dis- 
content with National Insurance 
costs (25 per cent) and the cam- 
ilications of employment law 
13 per emit). 

Aa new management practices 
develop alongside an increasing- 
ly professional temporary 
employment market, the pres- 
sure for change will be over- 
whelming: that Is surely the 
underlying message from the 
IOD. 

M. 8. Crosswell, 

Blue Arrow pie. 

Mercury House, 

Triton Court, 

J 4 Finsbury Square, ECS 

S tandar ds in 
accountancy 

From Mr Ralph Instone 

Sir. With reference to your 
article, A Time to Get Tough 
(November 9), it has been obvi- 
ous lor yean that the Account- 
ing Standards Committee is inca- 
pable of doing effectively the job 
for which it was. created, for two 
reasons. It lacks statutory 
authority, so in controversial 
areas its views cannot be 
enforced. And it speaks (or tries 
to) only for the accountancy pro- 
fession, whereas the form and 
contents of accounts are of con- 
cern to others, notably the 
\ Indua- 


Department of Trade and 
try, the financial institutions, 
the investing public, and (dare 1 
add) lawyers. That is why com- 
panies' accounts have been the 
subject of derailed statutory pro- 
vision since 1920. 

What is required is a statutory 
body analogous to the Insolven- 
cy Rules Committee, and com- 
Jpxising representatives of all 
interested groups. In this area 
self-regulation, and in particular 

regulation by the accountancy 
profession alone, is not enough. 
Ralph instant, 

7 New Square, 

Lincoln’s hm, WCX 

Alternatives to 
prison 

From Mr T. B. Webb 
Sir, Justinian (October 26), 
reflecting on the imprisonment 
of Lester Piggott for def ra uding 
the Inland Revenue, raised the 
question- of whether a prison 
sentence was an appropriate 
form of nonishment for offences 
of this kind. 

At « time when the prison sys- 
tem is grossly overcrowded, 


parity 
the cat 


there is an obvious incentive to 
search for -an alternative. How- 
ever, it is important that this 
Should 'have 'a 'deterrent 'effect 
broadly comparable to that of a 
prison sentence and that it 
should be enforceable without ei- 
ther employing a cumbersome 
bureaucracy of supervisors or 
placing too much additional su- 
pervisory responsibility on the 
police. 

It is doubtful whether Justi- 
nian's preferred solution, 
amounting to a rather elaborate 
form of probation, meets either 
of these requirements. A more 
effective approach might be to 
deal with “white collar* offend- 
ers through the tax system. 
There could be special categories 
of puxdtively Ugh tax rates, of 
varying severity, to which of- 
fenders could be sentenced far 
varying lengths of time, depend- 
ing upon the gravity of their of- 
fence. 

Such an approach would have 
a number of advantages. Firstly, 
it should have & significant de- 
terrent effect Few "white collar* 
criminals would relish having to 
pay income tax at a basic rate, 
for example, of between 50 and 
70 per cent with steeply rising 
marginal rates on top of that 
Secondly, punishment inflicted 
in this way would au tomatically 
take account of the offender's car 
ty to pay, which is often not 
case with fines imposed by 
the courts. Thirdly, ft should not 
be too difficult to graft stub a 
system on to the 
structure and it could pro 
be administered by the * 
Revenue without a targe increase 
in staff. The net effect would be 
to increase government revenue 
rather than expenditure. 

T. R. Webb, 

34 Meadowbank, 

Primrose Hill Rood, NWS 


Road 

.expenditure 

From, Mr A. P. de Boer 
Sr, It is unfortunate that your 
report. Extra for M-Way repairs 
(November B), repeated the mis- 
leading statisti c s of the Depart- 
ment of Transport about “in- 
creases" in road expenditure. 
The increases in planned expen- 
diture by the Department are in- 
sufficient to take account of the 
Chancellor'a forecast of inflation 
for 1988. Increases in expendi- 
ture planned beyond 1988 will 
only be real if .the rate of infla- 
tion falls below 3 per cent 
Far from seeing «n expansion, 
or speeding up, of the road con- 
struction and maintenance pro- 
gramme, the next few years will 
see a cut In real terms. 

The situation can only worsen 
in the foreseeable future. Given 
.the official forecast that road 
[traffic in Britain is likely to grow 
up to 32 par cent by the year 
the spending plans of the 



A.P. de Boer,. 

British Road Federation, 

Cowdray House, 

6 Portugal Street, WC9 



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London shares surge 5 % as Tokyo falls steeply 


BY SIMON HOLBEHTON IN LONDON AND STEFAN WAGSTYL M TOKYO 


SHARE PRICES surged in Lon- 
don yesterday as institutional 
investors returned the market 
despite a plunge in prices on the 
Tokyo stock exchange. 

London shares staged their 
strongest rally since October 19 
when the FT-SE index fell 249.6 
points to cut almost 11 per cent 
of equity values. Yesterday, the 
index rose almost 5 per cent to 
close 65.8 higher at 1,639.3. 

The market was boosted by 
some very positive comment by 
major securities houses that the 
first phase of the bear market 
was over. Senior analysts at War- 
burg Securities and Barclays de 
Zoete Wedd said the London 
market had fallen too far and 
represented good value consider- 
ing the outlook for the UK and 
world economy. 

In foreign exchange markets 
the dollar staged a modest rally 
during quite trading as some 
investors realised profits ahead 
of today's US trade figures. New 
York was virtually inactive 
because of the Veterans Day hot- 


FT-SE 100 Index 

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Nikkei Average 
Index 

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Japanese stockbrokers reduced 
the extent of the fall in 
The Nikkei index, w] 
down 1,170 points at one 
closed 649.70 lower at 21,038.' 

The 21,000 level was seen as 
crucial, not just for psychological 
reasons but because it is the 
point at which brokers have to 
seek extra security from inves- 
tors who have been buying 
shares on margin. 

According to traders, Japan’s 
big securities houses - Nomura, 
Daiwa, Yamal chi and Nikko • 
co-ordinated their efforts to sup- 
port prices. They jointly asked 
the Ministry of Finance to ease 
restrictions on margin trading in 


iday. 

Earlier, Tokyo suffered one of 
its worst trading days with 


mocks, by allowing investors to 
feral of only 30 per 


deposit collateral 
cent of funds, against 50 per cent 


shares plunging as investors’ 
fears grew about the apparent 
lack of progress in the US 


at present. The ministry did not 
"ately bt 


Administration's efforts to cut its 
budget deficit. 

A support operation, however, 
carried out by the four largest 


reply immediately but was 
widely expected to agree. 

The brokers then bought 
shares on their own account and 
on behalf of investment trusts, 
pushing up prices in the last 
hour of trading. Some traders 


said there were fears that the 
plunge in prices would hit pri- 
vate individuals, who were 
the chief sellers of stock 
ry. Individuals accounted 
ror most brokers' margin 
accounts. 

However, there was no sign 
that individual investors’ diffi- 
culties would spill over into any 
general crisis in the market. 
There are no signs of panic. No 
one is -really suffering," a foreign 
securities analyst said. 

In London, share prices began 
to rise on evidence of the first 
significant baying by institu- 
tions. They were During small 
amounts on Tuesday, but yester- 
day saw the first signs of sus- 
tained retail buying, analysts 
said. The FT Ordinary snare 
index closed 43.1 points higher 
at 1,290.0. 

Mr Ian Harwood, director of 
Warburg Secutiries's UK equities 
division, said recent share falls 
were overdone and that worries 
about a world recession were 
overblown. 


But while the change in insti- 
tutional sentiment was good for 


equities, gilt-edged securities 
were marked down. 


The gilt 

market’s barometre stock, the 
Treasury 11* 200347, lost 2% 
points to yield 9J20 per cent, as 
gilts were sold to buy equities. 

Wall Street stock prices were 
li tt l e changed in quiet trading 
yesterday. The Dow Jones indus- 
trial average was up about 30 
points for most of the morning, 
but closed only 2L05 aired at 
1899.2. 

In London, the dollar closed at 


DM1.6760, up from Tuesday’s 
close of DM1.6650, and at 


Y13SJ25 compared with Y134J50. 
The pound closed at $1.7790 
compared with $1.7860 and at 
DM2L982S compared with 2.9725. 


The Bank of England's trade- 
ng index dosed at 


weighted sterling . ... 

75.4 points against 75JS an Tues- 
day. 


Trade fears. Page 6; Hong 
• Fighting for 


Kong inquiry 
snrvi 


Page 20; World 
Stock Markets, Page 42 


Carla Rapoport in Tokyo reports on the future of Japanese industry 


Fi ghting for survival in land of rising yen 


ON THE seventh floor of the Kd- 
danren building in central 
Tokyo, an electronic monitor 
outside the lifts constantly 
flashes the current yen/dollar 
exchange rate in large red fig- 
ures. 

An official of the Keidanren, 
Japan's Federation of Economic 
Organisations, grimaced at the 
sign yesterday, sighing: "I have 
to close my eyes when I walk by 
it. It's too depressing’. 

Japanese industrialists have 
been complaining bitterly about 
endoka - the appreciation of the 
yen - since the dollar began its 
fall in 1986. But, rhetoric aside. 
Industry has been making a 
stunningly swift adjustment to 
the change. 

The latest bout of weakness in 
the US currency, however, is 
now cranking up the yen fur- 
ther. Local newspapers are once 


were hoping to lose a few com- 
as m trie < 


petitors in the electronics, motor 
car or machine tool industries, 
for example, have not been 
lucky. Not even in the bombed- 
out sectors of shipbuilding, steel 
or coal has there been a single 


notable bankruptcy in Japan 
jlummeted from 


since the gen pi 


240 to the dollar to 140. 

Can this adjustment continue 
as the dollar drops to Y130, or 
even Y120 or lower? 

The crucial consideration 
appears to be not so much the 
level of the yen against the dol- 
lar, but the rate at which It rises. 
The slower the yen rises, the eas- 
ier industry can cope. On the 


In talking with industry lead- 
ers, one senses less, not more, 
panic over the recent bout of yen 
appreciation. The real tension, 
they say, was at the beginning of 
the yen’s rise. Today, they show 
a fair amount of confidence in 
dealing with the problem. 

*We have coped with a drop 
from Y240 to Y140. We can 
almost certainly cope with 
Y130,” said an executive from 
one of Japan's leading electron- 
ics companies yesterday. 


and pile up the cash. Salomon 


Br oth ers in Tokyo estimates Jap- 
itly 


anese corporations currently 
in bank 


have about Y 120 , 000 bn 
deposits and another Y10,000bn 
in specialised investment trusts. 


• A leading edge in product 
innovation. Despite the effects of 


the high yen on margins, Japa- 
nese companies have increased, 
not cut, research and develop- 
ment. As a result, the latest 


advances in a whole range of 
ling from 


At the Tok^o corporate head- 


quartos of JVC, one of Japan’s 


top consumer electronics compa- 


nies, a giTniiar sentiment can 
heard. 


other hand, if the dollar goes 
fall, Japan's industry 
will once again oe looking at 


Mr Masanobu Ikeda, general 
ector of corpo- 


tummg 

each morning. Could this be the 
undoing of corporate Japan? The 
lessons learned from the last two 
years in Japan seem to indicate: 
not yet. From Japan's electronics 
giants to the lowly tableware 
manufacturers, Japanese Indus- 
try has become leaner, more 
diversified, less export-oriented 
and more multinational in its 
approach to production and mar- 
keting 

Americans and Europeans who 


steeply lower profits from the 
strongest exporters and pools of 
red ink among the weaker ones. 

Indeed, after a steep drop in 
profits in 1986, industry had 
almost completed its course in 
learning how to live with the 
high yen. The 330 major com par 
nies that recently reported prof- 
its for the six months to Septem- 
ber, for instance, have staged an 
average improvement of 38 per 
cent at the pre-tax Level. 

Overall, analysts are expecting 
profit improvements of between 
40 and 60 per cent by 1988, com- 
pared to 1986. As the dollar now 
slips from Y140 to Y130, that 
adjustment is continuing. 


and director 

rate finance, said yesterday:' *1 
think we can survive this crisis. 
We can expand in the domestic 
market and increase our overseas 
production. The meat important 
thing for our survival is not the 
value of the yen, but the devel- 
opment of new technolories. 
That is where our future liesT* 
The Japanese point out that 
adjusting to a continually appre- 
ciating yen is not. like. trying to 
squeeze blood out of a stone: 
There are. a number of factors 
which con t ri bu te -to their confh 


fields are now coming 
Japan. These new products, from 
microchips to luxury cars».are 
winning higher prices for the 
Japanese in oversea? markets. 

• More imports and increased 
overseas production. The reverse 
side of the high yen is che ap er 
imports. Not surprisingly, indus- 
try has actively stepped up its 
purchases of manufactured com- 
ponents from abroad. Indeed, 
Japan’s ratio of imports cd manu- 
factured goods has leapt from 
31$ per cent in 1986 to 45.3 per 
cent in September of tills year. 


accepted pay cuts, lay-offs and 
job changes, preferring to help 
the company through its difficul- 
ties. White-collar car company 
executives are out selling care 
door-to-door while part-time, 
mostly female, labourers have 
been replaced by robots or Asian 
workers offshore. 

At the same time, Japanese 
companies continue to enjoy the 
benefits of shareholders who do 
not clamour for bettor earnings 
or higher dividends. Most large 
stakes in corporate Japan are 
held by banks which do not 


expect steady, quarterly improve- 


ments in earnings, blit 
shares as a strategic, long-term 
investment. 


Even at the Keidanren, home 
of some of the most virulent 
complaints against the US bud- 
get deficit and the weak dollar, 
one can find calm voices. Mr Kd- 
ichi Nagaiuatso, assistant direc- 
tor of the financial affairs *at the 
Keidanren, said yesterday: "Each 


At the same time, industry Is fast 
ue produc 


dence. They include: 
fi cash 


• Large balances. Thanks to' 
the years of the overvalued yen, 
most exporters have been able to 
substantially reduce their debt 


moving low-value production 
offshore. Almost the entire audic 
cassette sector has moved to 
other Aslan countries: '■ 

• Compliant w o r kfo rce and sta- 
ble shareholder base. When 
Japan's -unemployment rate 
crept up to a record 3 per cent 
last summer, not a peep was 
heard from the country's trade 
unions. Workers have docilely 


company in Japan must try for 
further rationalisation. 


There is 
roam for this in every industry, 
even now, by changing from 


local producers to imparts and 
of product 


by diversification 
lines,’ he said. 


industry can cope with this 
latest bout of endoka as Jang as 
the Government lives up to its 
pledge of stimulating tile domes- 
tic economy, he wirf 


Swiss Bank chief 
leaves Association 


BY ALEXANDER NICOLL, EUROMARKETS EDTTOR, IN LONDON 


MR ANDREW Large is to relin- 
quish the chairmanship of the 
Securities Association, the lar- 
gest self-regulatory body in the 
newly-structured London finan- 
cial markets, following his pro- 
motion yesterday to the board of 
Swiss Bank Corporation. 


Mr Large, 45, will be tirconly 


non-Swiss director of the 
Based in Zurich, with the rank of 
deputy general manager, he wfll 
be responsible for running its 
investment banking activities in 
Switzerland as well as the rest of 
the world. 

He will step down from the 
Securities Association at the end 
of the year, shortly before the 
Association expects to receive 
formal authorisation to oversee 
all securities markets in the UK 
under the phased introduction of 
the Financial Services Act. 

His replacement is likely to be 
from -the Association's existing 



Andrew Large 


council, comprising senior prac- 
rawn fr 


tit loners drawn from the old 
Stock Exchange and a group of 
international securities firms 
with which the Exchange 
merged last year. 

Mr Large was head of Swiss 
Bank Corporation International, 
the bank s London-based inter- 
national securities arm which, he 
helped found in 1980. He has 
been a prominent spokesman for 
the international capital mar- 
kets, seeking to avoid the imposi- 
tion of rules which, according to 
the international firms, would 
make London uncompetitive as a 
financial centre. 

Mr Large recently led a suc- 
cessful campaign to persuade the 


Government to delay a key 
clause in the Financial Services 
Act. He said that following the 
Government’s decision, the Asso- 


ciation was rushing to produce a 
rule-book 


simplified rule-book to be sub- 
mitted for authorisation to 
replace the previous draft. 

He said it would not reduce 
investor protection but would be 
easier to understand. 

Swiss Bank Corporation’s 
plans to continue building up its 
international equity business - it 

has substantial operations in 
London and Tokyo - have not 
been diverted by the stock mar- 
ket crash, Mr Large said. 

Men and Matters, Page 18 


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Brazilians 
vote 
against 
oil groups 


By ho Ommay in Rto do 


NATIONALISTIC Brazilian poli- 
ticians have voted to ban all for- 
eign mining and oil exploration 
activities and force multinational 
petrol distributors into minority 
partnerships with national com- 
panies. 

The votes, taken in the key 
committee drafting Brazil's new 
Constitution, are thought certain 
to be reversed when the docu- 
ment goes for final approval to a 
plenary session of Congress. This 
confidence is based on the emer- 
gence of a new centralist group- 
ing in Congress which is pledged 
to rev e rse many of the left-in- 
spired elements in the draft con- 
stitution. 


Nevertheless, general political 
uncertainty ana the constant 
shifting alliances in Congress 
mean that the clauses remain a 
major cause for concern for com- 
panies affected. Both foreign and 
local businessmen expressed con- 
siderable alarm yesterday. 

Undo- the clauses approved by 
the 93-member drafting commit- 
tee, the four foreign petrol dis- 
tributors - Shell, Exxon, Texaco 
and Atlantic - would have to sell 
a controlling share of their busi- 
nesses to Brazilian partners. 

In the mining and oil explora- 
tion sectors, it appears that all 
non-Brazilian companies, which 
include Pecten, BP, Alcan and 
Alcoa, would have to abandon 
their activities. 


HK appoints head 
of markets inquiry 


BY GORDON CRAMB IN LONDON AND KEVM HAMLM M HONG 
KONG 


THE HONG Kong Government 
yest e rda y appointed Mr Ian Hay 
Davison, former chief executive 
of the Lloyd’s insurance market, 
to head a wide-ranging inquiry 
which may lead to an overhaul 
of the territory's troubled securi- 
ties industry. 

This follows the HK$4bn 
(S5l3m) Government-led rescue 
of the Hong Kong Futures 
Rvrhnpg p. and the four-day clo- 
sure of local stock and futures 
exchanges, after the collapse in 
world equity values last month. 

The inquiry also happens at a 
time of a widening rift between 
the small local stockbroking 
firms which dominate the 
administration, of the stock 
pYPhnpgo and the international 
securities houses which account 
for the bulk of business in Hong 
Kong equities. 

Mr Davison will be chairman 
of a six-member Securities 
Review Committee which Mr 
Piers Jacobs, Hong Kong's finan- 
cial Secretary, said yesterday 
would "recommend what 
changes are desirable to ensure 
the integrity of the markets and 
to protect investors”. 

Its brief covers the constitu- 
tion, powers, management and 
operation of the stock and 
futures exchanges, the securities 
and commodities trading com- 
missions, and the office of the 
securities conttnissioner. 

The committee is to start next 
week, aiming to complete Its 
report in six months. Its work is 

intended to be separate from 
that of Mr Robert Fell, who, 


the newly appointed chief 
tive of the Hong Kong Stock 
Exchange, is charged with the 
more immediate return of stabil- 


ity to the market. 
Four of 


the members of the 
Davison committee are promi- 
nent local C h inese businessmen 


with accounting or stockbroking 
xience. Foreign broking 
houses are represented by Mr 


Philip Tree, managing director 
of Citicorp Vickers da Costa in 


Mr Jacobs stressed that the 
Government had tried to achieve 
a balance among the member- 
ship "so that interests are prop- 
erly represented.* In London Mr 
Davison acknowledged: "One of 
the conflicts of interest is 
between the needs of the inter- 
national broking market and the 
local Chinese brokers.* 

There had been criticism of 
the way the exchange authori- 
ties, in particular, had handled 
the market collapse, he added. 
He had not yet spoken to Mr 
Ronald Li, the controversial 
chairman of the stock exchange, 
but had received his pledge to 
co-operate with the committee. 

Mr U, in Taiwan this week for 
a meeting of Asian stock 
exchange chiefs, has been lash- 
ing back at foreign financial 
institutions which operate in 
Hong Kong, accusing them of 
being racists. 

This drew a terse rebuke from 
Mr Jacobs: “I deplore remarks 
made by anyone that tend to 


jvoi 

fuel the fire, we are one coznmu- 


as nity.” 


Continued from Page 1 

Arab leaders unite to condemn Iran 


pledges of assistance for his 


near-bankrupt country amount- 
than S2bn in cash 


mg to more 
and 


oil if he fell into line with 
fellow Arab rulers, 

Arab Observers said President 
Assad’s concern about deteriorat- 
ing economic circumstances at 
home and his need fix’ financial 
assistance were behind his Initial 
decision to attend the summit 
Observers in Amman said it 
was premature to predict a loos- 
ening of ties between Damascus 
and Tehran as a consequence of 
the summit 


But the communique may 
on President 


have an impact on 
Assad's attempts to balance rela- 


tions between Ids Arab neigh- 
bours and Iran. Similariy, tenta- 
tive - steps towards a 
reconciliation between Mr Assad 
and President Sa ddam Hussein 
of Iraq may affect Syria's previ- 
ously dose collaboration with 
Iran. 

The summit decision, to 
endorse the UN Security Coun- 
cil’s ceasefire Resolution 5% and 
call for its implementation "in 
Into, according to the sequence 
of its operative paragraphs’ was 
a boost for Iraq’s diplomatic 
drive to isolate ban. Resolution 
698 Includes a provision for an 


ration of a ceasefire by both 

sides. 


Iran, however, warn* Iraq to 
be declared the "aggressor" 
before agreeing to a ceasefire. 
Unanimous summit support for 
UN mediation efforts will help 
underpin attempts by Mr Javier 
Perez de Cuellar, the UN Secre- 
tary General, to bring about an 
end to the conflict. 


inquiry into the origins of the 
Gulf war. but-only after a 


i deck- 


Arab 6 a united 

add to pressure on the* Soviet 
Union and China to support 
fully the UN-efforta to end the 
Gulf war 


THE LEX COLUMN 


London gets back 


into line 


The London market .has finally 
produced a rally. How long it 
ng, but 


wHI last there is no saying, 
by yesterday morning the FT- 
SE100 index had risen 110 points 
in the course of 24 hours. Partly, 
this is a matter of waiting for 
New York and Tokyo; despite 
starting from stronger economic 
fundamentals than the US and 
less obvious overvaluation than 
Tokyo. London has fallen harder 
than either. One of the most 
heartening things for the market 
this week has been the appear- 
ance of corporate buyers - Gran- 
ada, General Cinema, Laamo - 
evidently convinced that the fall 
has gone for enough. And, as 


British Airways 

Share price rotative to 
FT-AAI-Share Index 


HSEIi 



with the &15m spent by Laamo 
Oil shares yester- 


Feb 1987 


Nov 


on Enterprise 
day, the process has involved the 
much-needed injection of cash. 

The liquidity crisis goes some 
way to answer the puzzling ques- 
tion of why the UK market 
should have led the two bigger 
markets as it did. The BP flop 
was a mixture of bad luck and 
bloody-mindedness an the Gov- 
ernment's part, but the moun- 
tain of rights issues, flopped or 
otherwise, was simply a late 
bull-market excess. On the other 
hand, institutional cash flow will 
not simpty bounce back. Net unit 
trust sales in the first nine 
months of 1987 were over a 
quarter of total institutional cash 
ow, and much of that will not 


only dry up but go into reverse 
ighredemi 


through: 


■demotions. 

Though London may have dis- 
counted larger falls in New York 
and Tokyo than it has yet semi, 
they could still happen. Wall 
Street has today's trade figures 
to cope with, to ssy nothing of 
the Gramm-Rudman trigger on 
the budget deficit tomorrow 
week. There is still also the out- 
side possibility that Tokyo will 
finally crack, especially if the 
NTT issue opens at a discount on 
Monday. This looks like an 
exploratory rally on London’s 
part, and the market is by no 

n w » W fw* f rom fta ta-lhnhtiniw 


BA/BCal 


from BA- 
BA has got what it wants on 
long-haul routes, though with a 
Civil Aviation Authority review 
able; it can cany on operat- 
the eight licences it must 
return until new ones are 
granted, and apply for those new 
ones; it appears able to keep Air 
Europe oil the lucrative Paris 
route even after it withdraws the 
objections to Air Europe's 
licences; and it only has to give 
up 5,000 runway riots at Gatwick 
which, at less than 10 per emit of 
the merged group's total, is a 
small price to pay. Indeed, if BA 
does win back most or all of the 
eight licences the terms of the 
merger would not be substan- 
tially different from those the 
Commission originally found 
unacceptable. Since the Commis- 
sion has not demanded under- 
takings from BA, the only sanc- 
tion tiie government has is the 
threat of another reference. And 
to cap ft all the three-month 
has reduced BCal's price 
center more: 
e the travelling public 
may find little good news in all 
this, it (dearty » beneficial for 
BA shareholders. Add in. the 
good Interim resolta and yester- 
day’s 15 per cent jump In the 
shares to 144p is easily justified. 
The shares are now on a current 
year multiple of around 6, which 
given the potential savings from 
a merger looks remarkably 


Metals 


Had Lord King jumped with- 
out a parachute ana escaped 
with only bruises, he could not 
be much more grateful than he 
must have been on receiving the 
verdict on British Airways bid 
for British Caledonian. The 
Monopolies Commission, having 
decided at the outset that a 


cheap. The only reser va tion, but 
si substantial one. 


one, is the risk of a 
recession which could take a 
nasty chunk' out of profite. " 


Junk finance 


merger would be against the 


public interest, reversed that 
opinion on the basis of proposals 
forward by BA - which 
in the end take little away 


- put fi 
might ii 


One of the healthi er develop- 
ments in the shakeout in the 
world’s financial markets has 
been the exposure of the risks 
which have been taken by the 
more aggressive US investment 
banks. The US underwriters are 


Senior 
Financial 
Executives 
of outstanding 
ability 


Currently Earning 

£40,000X100,000 


Odjgers and Co. are Management Consultants 
specialising in executive recruitment We are currently 
extending our oontads iwfth senior executives of 
outstanding abSity and achievement in the field of finance. 
V\fe would like to hear from people aged 32-45 who feel 
that, in developing their careers over the next few years, they 
should not rule out the possibility of moving to a bigger job in 
another organisation. . 

Please write giving a brief summary of your . 
background and experience to Stewart WHson. 

Any approach be treated in the very strictest 

confidence. 



J 


MANAGEMENT CONSULTANTS 
' Odgers and Co Lfet One Oif-BondS#.' 
LaadanWXmm*m*$ & 



still counting the cost of their 
over-exposure to last week’s BP 
fi<m, aim now comes news that 
Goldman Sachs and Salomon 
Brothers are having serious diffi- 
culties refinancing a $600 m 
bridge loan for the nighly-Jever- 
$4bn buyout of Southland 
nation. 




US investment banks had 
become increasingly greedy in 
the US takeover boom, and the 
offer of bridging finance was a 
key element in an investment 
bank’s ability to win the big 


deals. By putting up their own 
capital, the investn 


i investment banks cut 
down the time it took to put 
rivals together, pad also assured 
themselves ot fat fees in the sub- 
sequent refinancing of the loans 
in the high-yield junk bond mar- 
ket. They have been able to take 
much greater risks with their 
balance sheets than the commer- 


cial banks and although they 


have been able to lay off” some of 
their risk, the longer the delay in 
refinancing the bridge loans, the 
iter the 


greater the pain. Even more 
embarrassing is the possibility 
that Drexel Burnham Lambert, 
the pioneer of the junk bond 
market, may be called in to save 
the day. 


The post-crash combination of 
reduced fear of inflation and 
increased fear of recession has 
had a predictable effect on most 
base metal prices. But copper has 
soared to record highs after the 
initial shake-out of speculators. 
This is less perplexing than it 
seems given the lowest stock lev- 
els since 1974 and recent capac- 
ity reductions. However, what is 
a little odd Is the opposite reac- 
tion of the aluminium price, 
which had been rising gradually 
in tandem with copper all year. 
Aluminium would suffer sooner 
from a recession, being closer to 
the consumers, but surely some 
recovery is imminent. 

The other odd thing about cop- 
per is that the relevant company 
stocks appear to have underper- 
formed the crashing markets. 
The US copper producer Phelps 
Dodge, for example, lost close to 
half of its value m the crash and 
since the price went through the 
roof has only clawed back some 
of the wav. Regardless of the 
Industry's lower cost base that 
may reflect a healthy scepticism 
about how long copper can fly, 
or perhaps investors are plung- 
ing straight into the metaL RTZ 
is unlikely to feel too disap- 
pointed that it has spent so long 
shaking off its copper image. 


$okir 

ie P r 


ti 








Financial Times Thursday November 12 1987 


SECTION in 


FINANCIAL TIMES 


The European tyuck 
k industry leads the world 

DO /bS 0 " but over-capacity is 
f ig now a real threat. Of 
B ' <E3 A the 50 producers in 
1960 only 1 1 are still in business and 
retrenchment has not yet ended. That 
is why one company’s increasing links 
with Japan are meeting criticism, says 
Kenneth Gooding 


Looking to 
the priorities 


Thousand* ol unas 

Daimler-Benz 
Is 
Ft 

Navistar 
General Motors 
Toyota / Hino 


Fiat / IVECO 
Mitsubishi 
Renault 
Nissan 


Saab-Scania 

Paccar 

Mack 

Thousands of units 


100 110 


; 

' 

>:• ■ • / 

*■. v «. •«. ■ ** — ■ * M 

. -■ :w.* • 





Production of major 
manufacturers 

Trucks over 6 tons 
gross vehicle weight 

1986 

* US only 


1 West Germany 

2 Japan 

3 US & Canada 

4 Sweden 

5 Italy 

6 France 

7 India 

8 Australia 

9 Brazil 

10 Spain 

11 UK 

12 Mexico 

13 Argentina 

14 South Korea 

15 S .Africa 


v a -rfTi v . tie > t* /JMsvl 

•» - • r f I 

I ■k-rZ-t 9. 1 



.*5 ; 

»•* j! 




Source: Dalmtor-Benz 



at 1 it M it«iT?IV£3 


Lnghton Mark 


c 




NOT FOR THE first time, Daim- 
ler-Benz, the Mercedes vehicles 
group whfoh -is the world's big- 
gest heavy ‘truck 'producer. Is at 
the centra of controversy which 
has brought outspoken criticism 
from its West European, competi- 
tors. 

The point of contention Is 
Daimler’s strengthening links 
with Mitsubishi of Japan and 
whether the German group 
should have looked for a Europe- 
an partner instead. . 

The issue came to the surfac e 
in September and caused 
squabbling among the European 
truck producers who otherwise 
were in a relatively upbeat 
mood. 

Demand for heavy trucks Cover 
3.6 tonnes gross weight) this 
year has been the highest since 
the peak of 1979 and this has 
relieved some of the stress In an 
industry which still has many 
underlying problems to solve. 

The optimism has now evapo- 
rated in the wake of the stock 
market turmoil and the possibili- 
ty that economic activity world- 
wide will go into decline and in- 
evitably dampen demand for 
trucks. 

In the face of such potential 
calamity, is not the squabble 
about Daimler's of a Japa- 


nese partner to develop and pro- 
duce in Europe a new range of 
vans Just a storm in a teacup? 

Not so, say 'its rivals. 

Mr Giorgio Garuzzo, managing 
director of Iveco, the Fiat-owned 
group which is Europe’s second- 
largest heavy commercial vehicle 
producer, says theventure would 
give ry«i ml or the opportunity to 
import technology, components 
ana possibly built-up vehicles to 
Europe from Japan, and other 
European companies might be 
forced to follow suit. 

There were many potential Eu- 
ropean partners which Daimler 
could have considered, “or if it 
wanted to dbdnvest there would 
have been' no shortage of Euro- 
pean buyers." ■ ■■■ 

There was also a danger that 
the proposed Daimler-Mitsnhlahl 
deal would (fivert the European 
Commission's attention away 
from what Mr Garuzzo claims 
are unfair competitive practices 
of Japan, not only those affect- 
ing the motor industry. 

But Mr Edzard Renter, new 
chairman of Daimler's manage- 
ment board, does not accept such 
arguments. *1 am free of Europe- 
an nationalism," -he says. "We 
must not start a fight between 
the continents. We need Europe- 
an harmonisation to be able to 


compete. JSut that should.' not 
•stop cooperation with ndn-Euzo- 


i -Mr Gerhard JJener, who until 
..recently- was .head of Daimler's 
'-commercial' vehicle division, be-' 
-lieves. the European industry 
; would do better to concentrate 
on other matters. 

: : "The key words are: over-ca- 
pacity, weakness- of the dollar, 
■protectionism, disadvantageous 
sites, the debt crisis of the Third 
World countries, the drop in de- 
mand from the Opec memb ers 
and so on,' he suggests. 

"An additional problem is that 
of the . state subsidies given to 
national producers In various 
European* countries. This serves 
to intensify still farther the al- 
ready very keen competition in 
(truck) prices and conditions of 
sale." . 

These underlying problems 
have already prompted a further 
major change in the industry's 
structure so that, of the 60 truck 
producers in Western Europe in. 
1960, only 11 are still in busi- 
ness. 

And, according to Mr -Aart van 
der Padt, . chairman of Daf 
. Trucks - management board: 
"There is every indication that 
this process has not finished 
yet." 


In the' post year dr ao( after the 
industry had time to' coipBder its 
future following the halving of 
demand for trucks between 1979 
and 1983, the following has hap- 
pened: 

General Motors, the world's 
biggest automotive group, has 
quit the heavy truck business by 
dosing down Bedford m'Britain 
and selling off its US operations 
to a company controlled ;by Vol- 
vo of Sweden. 

Fbrd, the second-largest auto- 
motive group, has eased its way 
out of truck production in .Eu- 
rope by selling its operations to -a 
joint company in which Iveco 
has effective control. 

Daf of the Netherlands took 
control of Leyland Trucks in the 
UK 

Just as important, Daimler 
moved Its commercial vehicle 
business into a separate division 
for the first time with its own 
management team, which is will- 
ing to look at everything again 
from a different viewpoint. 

The -most obvious outstanding 
structural issue facing the Euro- 
pean industry concerns Enasa, 
the Pegaso vehicles group of 
Spain- which is one of the few 
truckxnakera to suffer fiTmnrinl 
losses this year. 

The Spanish government has 


tried to sell it -. to, Toyota of 
- Japan and General Motors 
among others - but with no suc- 
cess. The Government has had to 
settle, for a new management 
■team and further caih injections 
in the hope that. Enasa can.be 
turned into a saleable company. 

One solution might be for it 
eventually to Join the Daf-Ley- 
. land group. Enasa already has a 
Joint venture with Daf. 

In spite of Daimler's com- 
plaints about government subsi- 
dies to truckmakezs, it Is already 
dear that nearly all the Europe- 
an governments which own 
truck companies want to return 
them to the private sector. 

Apart, from the examples In 
Spain and the UK (where it cost 
the British government another 
£680ra to offload its hnsmaldng 
truck and bus business) the 
.French' government has also ar- 
ranged for some domestic banks 
to take equity in Renault Vehi- 
cules Indus tri els, part of the 
state-owned Renault group, and 
thus gradually privatise Rvt 

Perhaps the one exception to 
the current rule is the Dutch 
government which' qtlll has an 
. uwHrpct- gharehnlHIf^g! tn Tlaf and 
sees the company .as a national 
asset: to he cherished end pro- 
tected. ■* 


.It is not clear whether the 
Dutch government would contin- 
ue to .keep a' shareholding if the 
Daf management has its way and . 
the company is floated on the 
Amsterdam and London stock 
exchanges in the not too distant 
future. 

The root of the truck indus- 
try’s problems go bade to the late 
197DS when world demand for 
heavy trucks over 16 tonnes 
gross weight, instead of rising as 
expected, collapsed from about 
620,000 in 1979 to only 350,000 
in 1983. 

This had a major impact on 
the Western European compa- 
nies which are the main provid- 
ers word wide of trucks of this 
type. 

Mr Wflfried Lochte, chairman 
of MAN Commercial Vehicles, 
says "The European track indus- 
try leads the world - but there is 
a danger -it will be weakened by . 
this over-capacity." 

World demand has now stabi- 
lised at about 400,000, according 
to Scania's calculations, but the 
European companies still have 
some way to go to cut capacity 
to match demand. 

At least.20 per cent of Europe- 
an truckmaking capacity has 
been removed in the past few 
years but rivals still complain 


that Daimler left it very late be- 
fore switching some of its West 
German capacity to car compo- 
nent production and that RVI 
did not act fast enough or cut 
deep enough either. 

Ironically, some truck compa- 
nies have ran short of capacity 
in Europe this year. They have 
the equipment and the space but 
not the trained people - and they 
will not be willing to create any 
more jobs unless they are sure 
they will need them for a very 
longtime. 

Capacity shortages have been 
caused by remarkably strong de- 
mand in most Western European 
markets - only the UK, where 
there has been but a marginal 
improvement, and Italy, which 
refuses to turn round, have 
bucked the trend. 

Sales of trucks over 3.6 tonnes 
in Western Europe last year rose 
by 4.7 per cent to 246,430. Dur- 
ing the first six months of this 
year sales were up again, by 9.2 
per cent to 130,000. 

Optimists say that sales could 
exceed 260,000 this year, giving a 
third successive year of growth/ 
the best result since 1980- but 
still well below the 315,000 
achieved in 1979. 

Demand in Europe this year 


Tha UK: production edges up 
The US: Wall Street mars the 

franca recov ery In the market Z 

West Germany: mood of 
confidence , - 

Italy: highly fragmented merket 3 

Japan: sharp rise In domestic 
sales; US sa les effort spraadkip 4 

Company prospect*: seven big 
European makers examined In 
detail 6 

Under teat: saving the legwork tor 
drivers 6 


has done much to offset the al- 
most complete lack of sales in 
the European's traditional export 
markets. But last year there was 
still a gap and, compared with 
the 4.7 per cent growth in sales, 
production of trucks over 3.6 
tonnes fell by 4 per cent to 
324,475. 

Looking ahead, the European 
Commission is determined to 
harmonise not only the technical 
rules for trucks but also to de- 
regulate transport so that there 
should be ' free movement of 
' goods between member countries 
by 1992. 

. West Germany, Spain and, to 
some .extent, France will feel the 
greatest - impact as their national 
regulations -are removed. Some 
estimates suggest that tariffs on 
West GermahToutes are about 30 
per cent above* competitive lev- 
els. 

BecauSe German hauliers have 
the highest tariffs and most pro- 
tection, they can afford to pay 
high prices for their trucks and 
demand very high specifications 
for their vehicles. 

They tend also to use the ser- 
vice centres ' operated by the 
truck manufacturers rather than 
do servicing and repair work 
in-house. 

When their protection is re- 
moved, the hauliers will have to 
change their ways - and this has 
. obvious negative implications for 
the two major German truck 
makers, Daimler and MAN. 


sions of trucks, Iveco's Mr Garuz- 
zo believes the Commission 
should think carefully. 

"I am convinced complexify is 
good for the productivity of the 
transport industry and will be- 
come more pronounced. And it 
will also tend to create a barrier 
which producers in other parts 
of the world, trying to sell into 
Europe, will find difficult to get 
over, if not helped to do so by 
the Europeans themselves. 

"Advanced specialisation of 
this land has provided European 
industry in general with stimu- 
lus to Innovate and to develop 
more .and more sophisticated 
techniques, giving it undisputed 
-leadership over the rest of the 
world-’ 



■' - ; v': vi!; : '• ^ vs.?-' z,S - - •• > A.- j ! i- ! • -.y: •• ■ • - • 

Already the kfst- sft t hr , now even better\mjue 





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The new Fbrd Thaisb already aflesEirgre^ 

Bandy improved fod economy, barer aO-raund vitiMlity Ad 
graiadrh^com63ndianiBlegendary predecsss(X - 

Little wonder then, that it outsdls every ^ ran <m the mad, and 
currently accounts for over 40% of all medium van siks. 

Now Fotd have improved the Transit soil further By alkingto 
customers up and dowmbecounny theyVe managed to 6ndways 
of making Britain's bea-seDer even better vabe. 

Asa resuk sperifkanons have been upgraded across the entire 
ra^eof^ans. chassis cahs. buses in both bngand short wheribsse 
models. 


AH with no inbxase in price*. 

Ry aampte. jag consider wha t you now gr on die Standard 

eh 

aiilhw>dUlfhiaddiw (wmoiily) * 
v*A hatum MW/LW radio 

Fmnn.1 Package ~ Loddng fad cm. icg mud flaps 

(van only) 

i^j^nul Package - Oock and trip nronfa cigar Briucc 
door stowagpbiiis, dipping naffriewniirroqftiBki^dicab 
floor mar xnd hand brake gaitee 


Normally drese features would cost wound £,4(XJt. TheyVe 
now standard. 

Specification is tip on the Thansit Ftopukr range coo. Dual 
passenger sear, a fcQ lengh cab mat, a kxiing fuel cap and a rear 
recovcry eye are now standard equipment 

Tli Trmtit'L’now comes wtchhesd^ropjet wash, a kicking 
fufj eap and loadspace ridewafl trm 

Once again they’re years for no increase &1 price*. 

Wha& more, 5-speed ransniission now comes as standard on 
all 2hae petrol and most 25 Di diesel models. Agan for no increase 
in price*. 


The Tonsic is already BricdrflsbeH-sdieEThe 1988 Transit is 
now better value than ewt 

For details of your nearest: Ford dealer and a copy of our new 
Commercial Vehicles brochure call Teledata on 01-200 0200 
anytime. 


1988 TRANSIT 

‘Maximum Wri price +Baod on maximum retaUpneeexdiufingVAE 













FinandaiTimesThursday November 12 198? 


COMMERCIAL VEHICLES 2 


The US 


Upturn marred by Wall Street plunge Production 

UNTIL THAT fateful day in Dee ^ to ^ transport- The reason b that all five of the • ■ 0 ^ dpd L mM teg gWbi^-1 

mid-October when the bottom ^ major class 8 truckmakers assem- /|TTii| W ■ I 

fell out of Wall Street, the US ** US truck makers We their vehicles within the US, I v M 8 wl 


UP 


UNTIL THAT fateful day in 
mid-October when the bottom 
fell out of Wall Street, the US 
truck industry was looking for* 
ward to a year or two of respite 
from the upheavals it has suf- 
fered since 1979. 


1980 1981 


Demand had been picking up. 


significantly throughout the 
whole of the truck market After 
a fall of 7 per cent in 1986 to 
265,000 vehicles, the market was' 
widely expected to rebound this 
year Co around the 286,000 level 
recorded in 1986. 


Chevrolet 

S3- 

CMC 

AM General 

FwM ittmr 
iH (Navistar} 
Ke n worth 


2,166 1.500 
168 — 

15372 13$38 
10306 15,666 
89 — 


1983 1984 ttBB 1988 

561 893 887 503 


‘pots which need to be transport- 
ed. 

Second, the US trade makers 
will become steadily more com- 
petitive in relation to imports if 
the dollar continues to g>H f» 


9,052 18545 18,440 14,712 
9733 17571 13518 9529 


The reason is that all five of the 
major class 8 truckmakers assem- 
ble their vehicles within the US, 
so that fixe US-owned co m pa n ies 
enjoy no real competitive advan- 
tage from the dollar’s decline. 


P ri 



% 


PatorMt 


The fastest growth was once 
again expected to be in the medi- 
um-duty class 4 to 7 units, with 
Gross Vehicle Weights CGVW) of 
14,001 to 33,000 pounds. But 
even the heaviest class 8 trucks, 
weighing 33,000 pounds and 


White 

Others 

total 


4885 4385 

23,395 28,143 
10,669 11,043 
24,618 20,559 
6,587 7815 

4853 4,527 
2,138 1.957 


10.999 17,814 17.709 1737B 
14382 30,834 23,776 24354 
4548 13,670 1X801 10381 
13,345 25,901 25,139 17,114 
4503 14.642 11322 KX282 


5.121 4906 11320 11338 

409 673 1,006 988 


However, regardless of the tim- 
ing and fixe structural character- 
ises. of the next recession, and 
whether the dollar goes on fall- 
ing or not, the battle for market 
share between Indigenous and 
foreign truckmakers is unlikely 
to abate in the foreseeable fix- 
ture: 


The key to long-term success 
in this business appears to be 
possession of enough financial 
strength and determination to 
make a long-term commitment 
to an extremely cyclical and 


risky market By that criterion, 
the fixture for uS-owned truck- 
makers remains uncertain. 


independents 84,614 84712 54293 66307 113,440 101,075 91.733 
Mnatry ‘ 121326 114.575 77,196 64693150349134330 116,477 


SoucKWMk. PiiMMrrr mirn rartrmi 


over, seemed to have a good 
chance of breaking out of the 


chance of breaking out 
sales slump of 1986. 


The specialist truck makers* 
stock price performance and 
profitability told the same story. . 


That would have made 1988 
•the second best for the heavy 
truck sales this decade and 
would haye gone a long way to 
repair the tattered balance sheets 


iSven Navistar, for years the 
biggest of the US specialist 
truckmakers and one of the 
grimmest victims of the world- 
wide 1982 recession, seemed fi- 
nally to be emerging from the 
shadow- with a much reduced 
debt load and three quarters in a 
row of solid profits. Its share 
price almost doubled between 
the end of 1986 and the summer 
of this year. 


and shattered capital spending 
plans of an industry which had 
become a shadow of its former 
self. 


But the cloud of potential re- 
cession does possibly have a sil- 
ver lining. Over the next few 
years the structural shift in the 
US economy away from goods 
production and towards services 
is almost certain to be reversed. 


In fite medium-duty class 4 to 
7 area of the business, the two 
leading US car manufacturers - 
GU and Ford - appear to be hold- 
ing their own, having completed 
major cost-reduction pro* 
■g ram mes in the US manufactur- 
ing facilities. Nevertheless, both 
companies have made dear that 


General Motors, which In 1979 
was second only to Navistar (at 
that time International Harvest- 
er) in its share of fixe d*-** 8 
market, has virtually abandoned 


heavy trade making. By 
Its class 8 business with Volvo- 
White, in a joint venture which 
is majority owned and domi- 
nated by Volvo, GM has given 
the Europeans another big boost 
in the US market. 


supply co n tracts with Japan and 
Latin America will form a per- 


Latin America will farm a per- 
manent feature of their 
long-range strategies. 


Powerful European compan y 
now control three of the six ma- 
jor competitors in the US class 8 
business. On the bads of the two 
companies’ 18 per cent marir^ 
share in 1986, Volvo-GM should 
become the third biggest con- 
tender in the market, after Na- 
vistar with 21 per cent and Pac- 
car, whose Ken worth and 
Peterbflt lines enjoyed 18 per 
cent between t hem. 

Last year, the next biggest 
company, with 15 per cent, was 
Frezghthner, a wholly -owned 

tf K Daijnler Bexa - 

Rftn, with 14-5 per cent, came 
Mack Trucks, an erstwhile indus- 
try leader, in which Renault now 
holds a 42 per cent stake: And 
that is a stake which the French 
company Is seeking to increase, 
In contrast to the controlling 
shareholding in American Mo- 
tors which Renault sold to 
Chrysler this year. 

Bringing up the rear, with 13 
per cent of the market Iwt year, 
came Ford. 


Paccar, the conservatively 
managed and widely respected 


Seattle-based company whose 
Kenworth and Peterbilt 
heavy-duty trucks had pushed it 
to the top of the industry's sales 
league in the Gist half of this 
year, seemed well on the way to 
another year of solid profits - 
approaching if not beating the 
record ill3m it earned in 1984 


Unfortunately, since the crash 
on Wall Street all of the econom- 
ic forecasters have scurried hack 
to their computers: The truck-' 
makers await their new predic- 
tions with utmost trepidation, 
for few businesses are more de- 
pendent than trucking on the 
state of the economy, the 
strength of industrial activity 
and the level of consumer de- 
mand. 


In response to the upheavals of 
the financial markets around the 
world, the US monetary authori- 
ties have strongly suggested that 
devaluation of the dollar is likely 
to continue, boosting the manu- 
facturing sector and promoting 
tradeable goods production. This 
long-term structural shift should 
be good for fixe truck industry 
far two reasons; Firstly, manu- 
facturing industry, unlike finan- 
cial services, for example, makes 
concrete products ana uses in- 


Thus, GM is importing, trucks’ 
from Isuzu and Ford’s line-up is 
increasingly dominated by 
tracks made by its joint venture 
with Volkswagen in Brazil. 
Meanwhile, the two specialist 
heavy truckmakers, Navistar and 
Paccar, are boosting medium-du- 
ty imports from Nissan and VW 
do Brasil respectively. 


At the top end of the market, 
in the 33,000 pound-plus 8 
category, a further fall in the 
dollar may be of limited benefit 
to the domestic manufacturers. 


For the first time this decade, 
.it almost began to look as if 
there might be enough zoom in 
the market for peaceful coexist- 
ence between these two indige- 
nous industry leaders and the 
powerful foreign-owned or for- 
eign -dominated challengers: 
Freightliner, Mack and White. 


■ «w* ’ . .V: * ,v 


r . .• A- 

• . * •f:/ *, 





3:. filrT 






Europe’s production by manufacturer* 





9 046 

0 

D 

09086 

D 2987 

0 

4090 

3937* 

D ■ 0 

0 

0 

39137 

3 0 

33339- 

0 

33039 

0 0 

25511 

0 

25511 


WmmSm 




The conclusion oT a deal also 
appears imminent tinder which 
Bedford’s remaining truck 
operations at Dunstable will be 
sold by its General Motors parent 
to Mr David J Brown’s group of 
vehicle production companies 
based in north-east England, e 







: t j. . 


The class 8 sales were forecast 
to rise to more than 125.000 
units from last year’s 116,475, an 
expectation which still looks like 
being fulfilled. But even more 
important, the market for the 
biggest juggernaut trucks was 
forecast to grow again in 1S8S to 
something approaching 140,000: 



Can even the best-run domes- 
tic companies, like Paccar and 
the resurrected Navistar, com- 
pete forever against multi-na- 
tional giants such as Daimler, 
Renault and Volvo? This ques- 
tion will hover over the US truck 
industry for the fa wnBMlAi fu- 
ture: 






P ? ^MW-TT7rT , | 


■Qrar 35 tomes 
SDMocAflomaSM tasty ( 




And If a recession should hit 
the US economy next year, ft 
may be answered sooner than 
anyone expects. 




Iwa’i newly Introduced 


6-7 low-eab truck 


Austria Krietaky 


msSI 






France 


Market recovers after price war 


«4 3Z7Z 
0370 512 


■ft! UK 

037 7640 


519 293 



03 1171 

32 OB 


800 2 » 

397 OS 


531 4662 

376 2541 


115 707 


NF 

Iwco Fori 
LtyMUMF) 


011 1776 

433 3330 


529 2BZ7 
02 3071 


0 1M77 

0 9372 

0 0 


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ty warrant secured loans, in a 
move designed to bring in pri- 
vate shareholders’ capital 
Indeed, the operation eventu- 
ally should enable RVI shares to 
be introduced to the Bourse in a 
few years 1 time in what could be 
the beginning of a partial priva- 
■ tisatian of RVL 

Following the RVT recapitalisa- 
tion, the French government has 
now decided to change the legal 
status of the parent company It- 
self to transform Renault from a 
regie, a state-owned company 
with a special privileged posi- 
tion, into what the Government 
ca l ls an ordinary state-contr olled 
company. This too will involve a 
restructuring of Renault’s bal- 
ance sheet, including the 
writeoff of same FFr 121m- worth 
of debts. . . . 

The RVI recapitalisation this 
year helped the truck group to 
reduce debt, thus saving an an- 



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nual FFr200m in interest pay- 
ments. The transfer of the 
stake to RVI has also helped con- 
solidate the links between the 
French and US truck companies. 
Collaboration between the two 


partners has been strengthened. 
Indeed, the tangible results of 


own) 


the tangible results of 
mership are now becom- 
eaaingly visible. Renault 


is now delivering 4000 vehicles 
a year to the US. 1116 two com- 
panies also recently unveiled in 
the US m engine for military 
vehicles jointly developed by the 
two partners. 

The French group is now also 


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IT HAS BEEN a good year for 
the French trade Industry after 
the miseries of the last few 
years. The market has recovered, 
with sales expected to rise to 
43,500 to 44,000 vehicles this 
year compared with 39300 last 
year. 

The price war which shook the 
market In the recent past has 
abated, with the main manufac- 
turers apparently content to 
maintain the status quo in terms 
of their market share. 

But most significant of all, Re- 
nault Vehicules Industrials 
(RVI), the large trade subsidiary 
of the state-owned Rgnm ift car 
group, has returned to the blade 
for the first time since the truck 
concern was farmed from the 
merger of the Savtem and Beriiet 
companies in 1974. 

After major restructuring, the 
Renault track subsidiary man- 
aged to repost a small consolldai- 


Ffrst-half production fids year 
totalled 24,720 vehicles and the 
company is now forecasting pro- 
duction of at least 48,000 for the 


fiill year compared with 41300 
last year. 

The restructuring has also in- 
volved a big reduction in RVTs 
workforce. By the end of this 
year, xt will have been' cut to 
about 19,000 people from 23,700 
at the end of last year and 27,000 
fi ve feat* aga 

Rvi s parent company also 


trudemaker. 

It also confirms the French 
company’s commitment to its US 
truck investment, in sharp con- 
trast to its dedsian earlier this 
year to withdrew from the US 
rer market by selling its control- 
ling interest m American Mot^ 
to Chrysler. 

i In .n *? ce » RVI recently 
launched the group’s heavfly-re- 
vised range of Midliner medium- 
sized trades. The French gro up 











l 1 1 









helped pot the trade subsldliry 
bade <m its financial feet this 
year through an important injec- 
tion of fresh cap ital and transfer 
of the parent company's 43 per 
emit stake in Ma ck Truck* of the 
US directly into RVL 
In all, the financial restructur- 
ing operation involved about 
FFt& 2 tin including the injection 
oT FFr2bn in cash from Renault 
tato RVI, another FFrZbn in the 
form of the Made 42 per cent 
stake, and last but not least 


share of the domestic track mar- 
ket well a h ead of its nearest rl- 





also at 


22/24 The Butta; Worcester- Telephone: Worcester 61 1721 


net profit of FFrSOm for the 
A half of this 


The coru- 


• per cent 


"*uut wax itau amm- 
waisto become number two on 
the french market, continues to 
lie third with a 14 to 15 per cut 
share followed by Volvo with 9 


to 10 per cent 

If the genera 


If the general situation has fa- 
proved on the French- market, 
one black point remains exports 
to developing countries. Hie in- 
ternational debt crisis and the 


















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Your investment 
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package 






















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Ft nanri«l Tunes Thursday November 12 1987 


Italy 




1* 

1 . s 





0oaaHvmoo’elS-toanmn 

IN COMPARISON with most of 
Western Enrobe, the Italian 
heavy road vehicle market re- 
mains highly fragmented. While 
80 per cent of overland goods 
transport is carried by commer- 
cial vehicles, the total fleet is 
relatively aged and In the control 
of thousands! of small operators, 
the ixidroncirtL 

Italy has a. total of 210,000 
transport companies, .compared 
to 40,000 in Wert Germany, with 
each company averaging Just 13 
vehicles against averages else- 
where in Europe of six to nine. . 

Many operators are struggling 
to raise capital to renew their 
vehicles, 40 per cent erf which 
are more than 10 years old. Some 
still cling to the hope that the 
Italian parliament will one day 
pass legislation, periodically 
promised and repromised, pro- 
viding for a subsidised 'scrap 
and purchase* nmnmffrri«i vehi- 
cle programme. 

Any attempt to gfve an accu- 
rate account of the Italian com- 
mercial vehicles market is bedev- 
illed by the absence of 
Independent authoritative statis- 
tics. New vehicle registrations 
are compiled by the Italian Anto- 
mohfle Club but not made pub- ■ 
'licly available. Therefore, infor- 
mation has to be gleaned from 
the producers themselves. 

As a result, the mart reliable 
Information., is that provided by 
Fiat, whose Iveco subsidiary 
holds about 60 per cent of the 
national market for carriers 
above 33 tonnes. 

Total sales of commercial vehK 
cles in the^prst half of the year 
registered an increase of about 7 
per cent, slightly bek*w the full- 


growth in deliveries in 


■ Strongest demand has been Dor 
.vehicles in the transporter .divi- 
sion, where sales have risen by 8 
per cent; followed by the. top- 
weight road vehicles. The light 
ana medium section has been 
under-performing the market 
with 4 per cent growth. 

Of the 25,800 vehicles deliv- 
ered; 254110 or 59 per emit car- 
ried flie Iveco badge; about 700 
fewer than in. the same period 
last year. Daimler Benz contin- 
ues to occupy second place on 
the sales list with 2,010, deliv- 
eries and 7j 8 per c ent a l the mar- 
ket, followed by RVI the Re- 
nault subsidiary 1 with 930 units 
sold and 343 per cent <rf . the mar- 
ket. - ■ • . 

Ford of- Europe totalled 851 
and 83 per cent followed by 
Scania with 800 ' sales (8-1 per 
cent), Volvo with 515 (2 per 
cent) and MAN with 285 (U per 
cent). 

Iveco says its European sales 
have risen by 4 per cent in the 
first half of the year compered to 
the first half of 1986, if Its new 
acquisitions of UK Ford and Ita- 
ly's Astra are excluded- The in- 
crease rises to 18 per cent if they 
are included, to reach a total of 
58,065 units. 

The Elat subsidiary claims that 
its Western European market 
share has risen from 17.1 to 183 
per cent in the same period. 

As last year, the company's 
growth has been totally depot- 
dent on Western Europe since 
sales volumes elsewhere are con- 
tiniring to contract. Last year 
Iveco sales outside Western Ea-- 


COMMERCIAL VEHICLES 3 


Production of major manufacturers 


Trucks ov*r 6 tons 


Daimler-Benz A3 
Mercedes-Benz do Bttrt 
Mercedes -Benz Aigertipa 
fiaghfirwr 


Prcdudng 

Court? 


D 

BR 

RA 

USA/CON 


■ ^ 

INt 


EQ/BC 

Wtft- 

MJOprf 

erUto 

land* 

118,100 

72.550 

124,464 

72,059 

+ 5 A 
- 0.7 

333 

1 > Fi 1 * ■ 1 n 

VWSBm 

Euqa 

243 

countries 
■ courted 

KO 


3Fo«d 

. Fort Motor 
Ford Motor 
Rad Motor Braal 
Foid Motor Argentina 

ANVVtsnriUlMIIIUBM 

Navistar hT toma tion al 
. Navistar Intamafional 

SOetteral Motors 

General Motors 
Bedfartf Commerc ia l VWde 
General Matos Bart 
Daewoo Motor 

Blbveta ■ ■ . ' 

Toyota motor 
Krx) Motors 

7 Volvo 

\IUV0 

TfcNo^Wte-TmcK 

BFlat/IVECO 

fVECO-Rat 
IVECO-Maglnjs . 


USA/CON 

ADS 


RVL 

Rensut\Wcutas todustririoB 
Rsnadl Truck Industries 

Tfieran Ousel Motor 
Motor fcetfca 


Kanwortfi Truck 

Petertrft Motors 

cfcfftensrtlBetettgjnfl4ia%) 

N 

MAN AG 


USA/CON 

USA 

USA/CON 


VMcswagenAQ 
17 VUrawogsndoBrasI 


British Lsytand 
AshokLsytond 


D 

16,446 

15,796 

18422 

*7,380. 

+ 93 
+ V.0 


14309 

17,452 

+ 223' 

D 

9999 

2380 

+ 7.1 . 

BR 

11,907 

15.072 

+ 25.7 


20,477 

15357 

-240 

GB 

13,803 

9907 

—273 • 

ID 

6,784 

5350 

— 16.7 


West German^ 


Over-capacity but 
mood is confident 


rope slumped by 31 per cent to 
22,385 vehicles owing to the 
steep fell in demand from oil- 
producing and developing coun- 
tries. 

An additional problem In the 
US was unexpectedly strong Jap- 
anese competition with Iveco 
models tbsfc prompted or££fljtis&- 
tion and marketing changes 
which, the company says, are be- 
ginning to daw bade lost ground 
this year.- .. 


Among the Iveco subsidiaries, 
Iveco Unhr of France turned in a 
markedly improved performance 
last year after finishing 1985 in 
the red. The com pany achieved a 
net profit of FF236m, after 
FF53,9m of de preciat ion an sales 
re venu e s of Fra728tn. 

Iveco Flat of Italy pushed up 
its sales by 4.5 per cent to 
L3,867bn mid. slightly raised 
profits' from L89.7bn to L92.7bn 
after depreciation of L1643bn 


and R and D -amounting to 4J 
per cent of sales.. 

Iveco Magirus of Germany, 
meanwhile, raised its profits 
from DM31 3m to DM883m on 
sales of DML85Sbn. The parent 
company, Iveco BV-Holland, 
more than doubled earnings in 
1986 by achieving a net profit, 
including the results of the sub- 
sidiaries, of F12833gi. 

Inf,,, UUU. 

soon njm 


WEST GERMANY’S truck manu- 
facturers are looking less gloomy" 
these days. Sal es have picked up 
after a long period in the dol- 
drums and neighbouring marireta 
have become more buoyant, 
even though over -capacity re- 
mains a problem. 

At Daimler-Benz, the timing of 
the Upturn could not be better 
for Mr Helmut Werner, the for- 
. mer chairman of the Continental 
tyre company in Hanover. Mr 
Werner has just moved to Stutt- 
gart to take charge of Daimler's 
commercial vehicle division, the 
biggest in Europe and the 
wand’s largest in vehicles over 
six tonnes. 

If Mr Werner makes a success 
of the Job, he will be well in line 
for the top management Job at 
Daimler in the early 1990s. Until 
then, however, his task will be to 
ensure that the extensive ration- 
alisation at Daimler, which has 
five commercial vehicle plants in 
Germany, continues to pay off. 

At Iveco, too, the mood is more 
cheerful this year. The German 
end of this Flat subsidiary, num- 
ber two in Europe, has been 
through some painful restructur- 
ing in the past few years. Now, 
Iveco Magirus, based in Ulm to 
the south of Stuttgart, is exper- 
iencing rising sales and steady 
profits. 

In the first half of 1987, new 
truck registrations in Germany 
showed a rise of nearly 10 per 
cent, according to the co un tr y ’s 
automobile industry association 
(VDA). Despite some weakening 
in the second six months, last 
year's total of 143340 vehicles (a 
rise of 7 per cent on 1985) should 
still be exceeded slightly. 

At Daimler, trucks now make 
up some 30 per cent of turnover, 
slightly more than last year, af- 
ter the recent improvement at 
home and abroad. German and 
other European markets have all 
been more' receptive. .But the 
Middle East, previously a favour- 
able market for big' trucks, re- 
mains weak as a result of tow ail 
prices. 

For this year, Daimler is plan- 
ning to keep total commercial 
vehicle output at Its domestic 
plants at around last year's level 
of 145,000 units. Worldwide, in- 
cluding its plants in the US 
(Freighthner), Spain, Argentina, 
and Braal,- the «in» is to build 


Europe’s CV production* 


UK 

Italy 111 

Ranee* 1 * 

Spain* 1 * 


■hare taa»f 

38.18 120,824 

1&29 54,186 

1248 54,426 

1236 51,608 

9L96 30,744 

4.67 13,595 

435 13,098 


35.70 253 

16.01 933 

16.08 -25.57 

15J25 -24.16 

9l08 5.11 

4.02 11.48 

337 785 


324*474 40000 33MM 40000 -4.44 


( 1 ) 1965 rwiwtoodOjaton^wohoollCV went 
jpMT 3£ lomcr, ndudM vfles, excUtas tun. 


SMcan aw winareyOre a BniaSoal L 


about 10,000 more vehicles for a 
total of more than 236,000. 

Most of the non-German 
growth in output to 90,000 units 
is likely to come at Freightliner, 
Mercedes-Benz Espana, and Mer- 
cedes-Benz Argentina. The Bra- 
zilian subsidiary, which has dou- 
bled output in the past three 
years, is expected to maintain 
the high level of 1986. 

Whether the business is profit- 
able or not is harder to establish. 
Daimler does not separate out 
truck profits from the total. 
(Last year, the group earned net 
profits of DM1.8bn on turnover 
of DM65 .5bn). Other companies 
in the Industry reckon that 
Daimler has been losing heavily 
on its European truck 
operations, though the German 
concern says its total commercial 
vehicle division is in the black. 

At Iveco, where earnings of 
the German operation nearly tri- 
pled last year to DM88m, the ex- 
pectation is that total industry 
sales in Western Europe will ex- 
ceed 400,000 vehicles over 3.5 
tonnes for the first time since 
1980. The first half of 3987 saw a 
near 16 per cent increase in new 
■registrations to 210,000 vehicles. 

In Germany, France and Italy, 
the combined increase was 126 
per cent, with a 21 per cent rise 
-for the rest of the European mar- 
ket Among individual countries, 
Spain showed the biggest jump 
•in registrations with 31.5 per 
cent, followed by France (17 per 
:cent), Germany (14 per cent), 
Britain (10 per cent and Italy 
(73 per cent). 

Iveco Magirus, formerly part of 
Ktaeckner-Humboldt-Deutz, ex- 


pects to turn in another profit 
this year, though earnings 
growth will not be as steep aa 
last year. Production In 1986 
went up from 10,600 vehicles to 
123OO with turnover approach- 
ing DM1. 9bn. This year, output 
will total some 14,000, with a 
further 10 per cent rise planned 
in 1988 as capacity is expanded 
at Ulm. 

The Ulm company's return on 
safes advanced smartly from less 
than 2 per cent to almost 5 per 
cent, a level which Mr Wolfgang 
Keller, the chairman of Iveco 
Magirus, hopes can be main- 
tained. More than half of the 
German company's output is 
sold abroad, mostly through oth- 
er Iveco subsidiaries. 

Despite the recovery in de- 
mand, however, the industry still 
has a long way to go before re- 
turning to previous levels. As the 
VDA points out, the German in- 
dustry last year turned out 
286,000 lorries, buses and other 
heavy vehicles. In 1980, the fig- 
ure was 358,000. 

"The German commercial vehi- 
cle industry is still an a difficult 
track,* the VDA says. Over-ca- 
pacity remains a problem, with 
European plants that are no lon- 
ger competitive kept going by 
subsidies. 

Adding to the German indus- 
try's continuing problems is the 
strength of the D-mark, especial- 
ly since important competitor 
countries like Sweden and the 
UK have experienced steep de- 
valuations in recent years. 


Andrew Fisher 


;. .• • f 


tUiflWVynamics 




DELCO OPENS NEW DOORS 


TO THE FUTURE 


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IV* 


FmgncioJ Times Thnr»d«y No v e mb er 12 1917 


C COMMERCIAL VEHICLES 4 ) 


Japan 


A sharp increase 
in domestic sales 


Au- 


JAPAfTS COMMERCIAL vehicle 
industry is enjoying a brisk re- 
covery this year following sever- 
al flat or declining years. DonreSr 
tic sales have been rising sharply 
and may be up as much as 24 per 
cent in the current fiscal year, to 
March 1988, according to a re- 
cent industry study. 

The recovery is due mainly to 
the Japanese government's new 
emphasis on stimulating domes- 
tic demand, -and It Is a rag help 
in offsetting continuing weak- 
ness in exports caused by .the 
high value of the yen. 

Exports of commercial vehicles 
were down 17.3 per cent in the 
six months to September this 
year, according to the Japai 
tomobile Manufacturers 
tion (JAMA), and they are even 
being affected by political con- 
siderations these days. 

Nissan. Diesel, one of the lead- 
ing Japanese producers, recently 
gave up a contract to sell 100 
large trucks to North Korea after 
the US Government expressed 
fears that the trucks would be 
used as rocket launchers. Other 
Japanese manufacturers agreed 
not to step in and take over the 
order. 

The result is that production 
has bumped along at fairly low 
levels. However, there is also 
some prospect of recovery In 
overseas sates as well as the feed- 
ing Japanese producers move 
quickly to strengthen their mar- 
keting and production links with 
overseas groups. 

The Ministry of International 
Trade and Industry's truck pro- 
duction index has been above 
the 1980 base of 100 for most of 
the year, but it suddenly 
dropped' to 80.4 in August. 

But the real excitement is in 
the domestic market where unit 
sates showed increases In each of 
the first nine months of the year. 
In September, for example, they 
were up 10.6 per cent to 107,322 
units, and most analysts expect 
continuing rises far the rest of 
the year 

■Truck demand has been firm- 
ly restored,’ Mr Tomdo FutamL 
p resident of Hino Motors, said 
recently. And the prospect of a 
lot of major public works pored* 
ects getting under way in Japan 
in the next few years suggests 
that he may well be right. 

Commercial vehicle industry 


executives have been gloomy far 
so long that it was difficult for 
than to believe the improvement 
in their fortunes when it started 
to appear earlier this year. How- 
ever, by midsummer' the trends 
were clean and they began to be 
more confident 
Most initial forecasts of trade 
(over &5 tonnes) output far the 
current fiscal year to March 81, 
1988 ware for sales of 116,000 
units, which implied' a continua- 
tion of the weak trend that has 
been im de 11 ' way since the record 
217,000 units sold in 1070. ■ 


The producers are mov- 
ing quickly to strength- 
en their marketing and 
production links with 
overseas groups 


However, Mr Isamu Kawai, 
president of Nissan Diesel, said 
m July that domestic sales this 
year could well go beyond 

130.000 units. And early this- 
month, the Industry revised fts 
forecast upwards again to 

140.000 units, up 24 per cent 

from last year. 

The latest government forer 
of corporate spending an 
plant and equipment will only 
reinforce the optimism. The Gov- 
ernment's Economic Planning 
Agency said early this month 
that most companies were revis- 
ing upwards their 
ing programmes in 
the general economic 
and that capital _ _ 

industries could be up 7 per cent 
in the current fiscal year. 

The Indications of reoovery 
have already appeared in some 
companies' financial statements. 
Hino Motors, the industry leader, 
has just reported a 322 per cent 
jump in profits in the six months 
to September 30 to Y3.9bn. 

The company said the im- 
provement was due to improved 
sales of trucks both at home and 
abroad. It said its total sales of 
trucks and buses reached 34,000 
units, 8,000 more than in the 


first half of the previous year. 

Safes of lug tracks were partio- 

Itlfiriy hrjgV rwnrany fiaij, 

rising 80 per cart too^ST units. 
This reflects the impact of the 
Government’s Y6,OGObn eruer-1 
gency economic stimulation 

^MltrolnsM^ Motora (MMC), 
known far its Fuso heavy trucks, 
reported a similarly strong 
growth in sales of its trucks 
(over 3-6 tonne class) in the first 
naif of its current fiscal year. 
Domestic sales, for example, 

1 per cent to 43, 300 
exports rose 27.8 per 
cent to 24,800 units. 

MMC, like most of its competi- 
has been busy arranging for 
[notion abroad. In Septem- 
i& announced a tie-up with 
Daimter-Benz of West Germany,, 
the world's largest producer of] 
heavy trucks, under which the 
two companies would, among 
other things, begin a feasibility 
study on the production of MMC 
commercial vehicles at a Mer- 
cedes plant in Europe and intro- 
duce some Mercedes commercial 
vehicles and buses, T-l Trans- 
porter, MB-N aeries, multi-pur- 
MIMOG, large-size 


were up IS per cent to 
units while 


high 


pose 4WD UNIM 
special tractor and 
decker bus 0303, into 
nese market 

Mr Toyoo Tate, president of 
MMC, said in September that the 
new partnership with Daimler- 
Benz was “the third pillar" of 
MMC's global business strategy. 
The company already co-op- 
eration agreements m care with 
Chrysler of the US and Hyundai 
of South Korea. 

Nissan Diesel has been broad- 
ening its links with Navistar in 
the US since establishing a mar- 
keting relationship in 1983. Ini- 
tially, Nissan Diesel was simply 
supplying Navistar with medi- 
um-sized tracks. In a recent ex-, 
pp m u fo n erf the anangonent, Nis- 
san Diesel and Navistar will 
develop a new 7 tonne heavy 
dudy truck far the US market, 
beginning next year. 

- The new truck will use Nissan 
Diesel’s body and an engine de- 
veloped from an existing Navis- 
tar model. In the initial stages, it 
will be manufactured in Japan, 
but once production reaches 
3,000 units, production will be 
transferred to the US. 

laaRodgar 


JAPAN'S quartet of heavy truck 
producers first moved Into the 
US market in 1984. Initial sights 
were set - an class 6 to 7 trucks 
(7-16 tonnes GVW) where appli- 
cations centre largely on Inters 
deliveries. 

salty involve round 
of SOD to 600km per day 

require only local service 

and support facilities. 

The opening safes efforts were 
concentrated largely in the 

north-east corridor but represen- 
tation Is rapidly spreading to the 
West Coast with coverage of all 
major points between. 

With this emergence of an in- 
terstate network, plans are in 
hand to market coverage 

upwards into the long-haul due 
8 sector. Downrange, some axe 

inthe 

feet 

All have suffered from the 40 
per cent strengthening of the 
yen since early 198JL with 17 
suppliers in the class 6-7 sector, 
the US market remains extreme- 
ly congested and Japan faces 
stiff competition, from not only 
domestic out also European sup- 
pliers. 

The local producer GMC leads 
pI«m G sales in the US, with Na- 
vistar heading sectors 6 and 7. 
The European supplier Iveoo 
leads the importers in class 6 
with Mack - in which Renault 
retains a 42 per cent holding - 
heading the cress 6-7 importers. 

Volvo and Daimler-Benz are 
active in these sectors and Pac- 
car is moving down range from 
class 8 with new trades sourced 
from Brazil. 

Different strategies have been 
adopted by Japanese suppliers in 
the US market. While Hino 
moved early to establish a local 
assembly base at Jacksonville; 
the others held back. 

While isuzu and Nissan Diesel 
decided on a joint approach - 
with GM and Navistar respec- 
tively - both Hino and Mitsubishi 
have opted to go it alone. (When 
these mint supply arrangements 
are taken into account Japan's 
penetration of the US heavy 
truck sector rises to nearer 7 per - 
cent). 

At product level, efforts so far 
have concentrated exclusively 
on diesel-engined cab-over de- 
signs. From 36 per cent in 1880, 
the diesel share of the US track 
market has risen to almost GO 
per cent but this is the sector In 
which E u ropean rivals are most 
active and nonre producer Ford 
is also fielding a range of com- 
petitivdy-prteed dan 6-7 diesel 
cab-over trucks. 

Hino was the first Japanese 
track m a nufa c ture r to enter the 
US market In 1984 It introduced 
its medium-duty trucks In five 
southern states and In the fol- 
vear Hino Diesel Trucks 
(USAJ was fanned In a joint ven- 
ture with IGtsui. 

After eadier talks with Ford 
fell through, Hino agreed a deal 
984 wtth ~ _ 


Japanese makers In the US 


Sales in the US 



Florida for initial assembly of 
500 t^idrf in the 6-7 tonne pay- 
load range. Output was planned 
to move up rapidly to 1JSQ0 units 
rear with cabs and chassis 
in from Japan, but as- 
was not cost-effective 
and this venture was terminated. 

Hino has now spread across 48 
states with a network of 86 inde- 
pendent dealers selling built-up 
imports. By March 1988 it te 
planned to raise tills to 125 deal- 
ers. An overall target of 2500 
sales this year is to oe raised to 
5,000 by 1990. 

The introduction of new mod- 
els late last year took the import- 
er into the dass 5 market rad a 
move up to class 8 now looks 
likely within the next two to 
three years. Before this, Hina's 
must be modified 


to meet US emteian and note 
control legislation, due to be fur- 
ther tightened in 1891; 

Vehicle weights must be 
trimmed to increase payloads to 
a competitive level and aU eteo- 
trical systems must be s w it che d 
from 24 to 12-vott dradts. 

US long-haul operators who 
buy dass 8 trucks are used to 
; different makes of enr 
driveline making up 
completed vehicles. Hino 
has recognised this and is al- 
ready breaking away from Its 

in-house tradition ■— ’ 

tional Cummins 
dass 6 trucks as 
transmissions. 

Under p res s ur e from the yen, 
t he ^imp orter iagrf ngjto a^hlg 

Smotias said that if 


there is any fur t he r weakening 
of tiie dollar it will lode seriously 
at entahHshftig a m a nufa ct uring 
presence in the US although it. 
would prefer its safes base to rise 
to “several thousand units" be- 
fore making such a move. 

Mitsubishi Fuso Trade, of 
America first tackled the US 
market in spring 1986. From 

tlhnp m o nmtrfTig mfflpk In fi 

and 7 toetaparter added its FE 
(dass 3) range last January and 
mere are dans to ship in aim 5 
rt akb be ginnin g mm ■ 

An agreement faw , 
Gated distribution rights in the 
Ugkt track sectors to aharehdkfer 
Chrysler, but a move into dees 8 
is under consideration as the 
dealer network is expanded. In- 
dfedlng. category 8, Mitsubishi's 
truck sales were reported at 


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.' (Japanese 
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in 1984 


Usa E n terprises <rf 


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Truck industry of lead 

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293 

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39 

47 

43 

45 

47 

-18 

+28 

- 7 

+ 3 

+ 5 

Exports 


109 

86 

60 

96 

55 

+ 0 

-27 

- 9 

- 6 

- 2 

Production 


151 

m 

101 

101 

105 

- 4 

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114 

85 

76 

73 

72 

- 2 

-12 

-11 

- 4 

- 1 

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38 

39 

40 

34 

39 

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+ 1 

+ 2 

-15 

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19 

17 

tt 

15 

14 

-19 

-10 

+ 7 

-20 

- 5 

Production 


39 

35 

34 

29 

30 

- 7 

-9 

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40 

45 

40 

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48 

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21 

16 

16 

14 

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-13 

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49 

48 

52 

38 

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-27 

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17 

17 

« 

20 

-35 

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+ 1 

+10 

+ 6 

Exports 


15 

19 

19 

21 

21 

-33 

+27 

- 3 

+11 

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24 

30 

28 

34 

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-as 

+23 

- 8 

+22 

. -16 

NmrwSierai|BlH*»B 


5 

5 

5 

6 

6 

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+ 5 

+ 1 

+17 

- 5 

Exports 


47 

42 

51 

50 

55 

+ 7 

-n 

+22 

- 2 

+11 

Producfion 


48 

47. 

54 

54 

. SB 

- 2 

. -r 4 

+15 

+ 1 

+ 9 

SSL 


5 

5 

3 

1 

1 

+92 

- 0 

-34' 

-57 

-20 

Production 


15 

14 

12 

V 

13 

+29 

- 6 

-18 

-16 

+34 ' 

eJpotS 


80 

71 

83 

124 

- SB 

-23 

-12 

+18 

+49 

-21 

Production 


203 

185 

234 

266 

220 

-0 

.-9 

+27 

+14 

-17 

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173 

177 

255 

284 

258 

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+44 

+11 

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12 

4 

3 

3 

3 

-62 

-63 

-22 

-21 

- 4 

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158 

168 

272 

258 

228 

-30 

+ 8 

+62 

- 5 

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41 

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42 

55 

70 

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28 

36 

51 

68 

-45 

-24 

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+44 

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19 

14 

19 

21. 

27 

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1,086 unite over the first nine 
months of this year.' 

From a start fa the eastern cor- 
ridor, Mitsubishi is moving to- 
wards the West Coast with a 
complement of 00 dea ler s- TfcUcs 
are already under way to enlist 
West Coast dealers aid first ap- 
pointments are expected by the 
end <rf the year. A target of 160 
dealers has been set for late 
1988. 

- With the rise of the yen, Mit- 
subishi is invegtigrtfaig opport u - 
nlties to incorporate components 
from tire US Into its truck range 
and opportunities fra: a local a»- 
sembly fedUtyare reported to be 
“under study. 

In February 1884. Nissan Die- 
sel America was set up in Dallas, 
Texas to begin exporting tracks 
to tire US market. Other regional 
offices followed In Chicago, far 
the central US, the North East 
and the West Coast. 

First exports, of dass 7 cab- 
over rigid trucks got under way 
In mid- 1985. Rated at 13 tonnes 
GVW, these were supplemented 
by IS tonne units in tire follow- 
ing January with tire later mUO- 
tta* of rings 7 tractors.' 

Best-scPer of the current range 
is tire CMA 83 (8 tonnes GVW) 
wM^a^^lcations as. recove ry ve- 

erat«f tructo^nd^tonkecs lar^m- 
ter-clty deliveries. The 
company's own Nissan Diesel en- 
gines may be matched with op- 
tional Eaton axles and ABfeon 
transmissions for the US market. 

FUI year sales axe expected to 
reach 1,500 to 2fi00 units and 
tire addition of class 3 models (5 
tonnes GVW) is' scheduled, for 
next summer with “baby* dass 8 
trades expected to follow. An in- 
dependent network of 190 deal- 
ers is being expanded to 220 out- 
lets nationwide. 

In October 1985, Nissan Diesel 
achieved an important break- 
wfth agreement to sup- 
cnaticnal Harvester (now 
Navistar) with up to 3*000 mid- 
zange diesel cab-over trucks an- 
nually. 

These ware designed to oran- 
plement the C ar go st ar line and 
they are distributed as dass 6-7 
Navistar vehicles by the US com- 
pany's 860 dealers. Deliveries be- 
gan eariy last yean 

UH1 KDDBTCSQH 


■& 



The first Crane Frvehauf trailers were, we must admit, 
one-horse affairs . 

But since the 1860's, we've become the major manufacturer 
in the UK, and part of the biggest trailer company in the world . 

We've done it by being first : First, for example, to introduce 
anti-lock braking as standard . First to employ robotics in 
manufacturing . First to offer a nationwide service network. First with 
close-coupled drawbar trailers, bottom-loading vapour recovery 
tonkers, the radically new all-wheel-drive tipper ... the list goes on and on . 

In fact, whichever way the market develops, you'll always find 
Crane Frvehauf in front 




PEGA5D 


Horse power. wmmmmmm SsSS** ' 

PEGASO (ENASA>AvdaAiagdn402.TELEX 42803 DEX.28022MAKUI>^AIN. 



■J 









Financial Times Thursday November 12 1987 


, 

iri 


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ITS 



: FUTURE. 



By providing its customers with the widest choice of products for use in the 
widest range of applications. 

By supporting them with one of the largest dealer networks in the country 
fond the optimum level of parts and service back-up). 

By investing £150 million over the next five years. 

By adding to an assembly plant that is already one of Europe’s most modern. 

By pursuing a carefully structured policy of internal growth and 
development. 

By reinforcing its leading position in its £1.2 billion market. 

By cr eatin g the next generation of new product development, the first to 
carry the company’s badge. 

By committing itself to the highest degree of excellence at all levels. 

LeylandDAF 



A COMMITMENT TO THE FUTURE. 


TELEPHONE: LEYLAND DAF MARKETING AND SALES: THAME (084421) 4666. FREIGHT ROVER VANS: 021-328 1777. 








VI* 


Financial Times Thursday November 12 1987 


( COMMERCIAL VEHICLES 6 ) 


Kenneth Gooding exam ines the results and prospects for Europe’s leading manufacturers on this page and the next 

Renault Vehicuies Industrfels 


Daimler-Benz 


Stronger links with Japan 


DAIMLER-BENZ, the world’s lar- 
gest producer of heavy trucks, is 
signalling a significant of 

direction. 

Across the whole spectrum of 
the group's commercial vehicle 
activities ‘we are looking at ev- 
erything again," says Mr Jurgen 
Schrempp, who is responsible for 
sales in the new commercial ve- 
hicle division. 

•Just because we said some- 
mis not feasible five yean 
not mean it still is not 

feasible." 

The new approach follows a 
complete reorganisation of Daim- 
ler's management structure 
made necessary by a major ac- 
quisition programme which in- 
cluded diversification into aero- 
space (Domier) and electronics 

^ In t^ie past each member of the 
top management team has been 
responsible for both cars and 
trucks. However, as part of the 
new structure, a management 
team dedicated solely to the 
commercial vehicle business has 
been installed. 

One of the first results of the 
change in style has been Daim- 
ler’s determination to extensive- 
ly widen its previously tenuous 
links with Mitsubishi or Japan. 

The two companies are now 
talking about seating up a joint 
venture to develop and produce 
vans of all si»* with production 
in Spain as well as west Ger- 
many. 

Tim potential combination of 
Mercedes with Mitsubishi, which 
uses the Fuso name on its trucks, 
is a formidable one and has up- 
set Daimler’s rivals who feel that 
the German group should have 
looked for a European partner 
rather than one from Japan. 

The quid pro quo for Daimler, 


however, is 


Mitsubishi- commercial 


would open up its strong ear 
dealer network in Japan to Mer- 
cedes models and help distribute 
the German company’s commer- 
cial vehicles in that country. 

The decision to split the com- 
mercial vehicle operations away 
from those of care Is a very logi- 
cal step. Dr Gerhard Lienor, the 
manag ement board member re- 
sponsible for the commercial ve- 
hicle division immediately after 
the change, says, however, that 
the split was already under con- 
sideration because the group's 
sales of Mercedes care and com- 
mercial vehicles world-wide had 
reached about DM 50bn a year 
and Daimler was “in danger of 
losing flexfbilily.” 

Another director, Ernst Goehr- 
Ing. deputy head of commercial 
vehicle research and develop- 
ment, says that divisionalisation 
is already having a beneficial Im- 
pact - particularly by speeding 
up decisionmaking. 

Dr Liener also points out that 
the two sides of the vehicles 
business are no longer in step 
reflecting the economic cycles. 

Since 1980 the commercial ve- 
hicle operations have been 
gripped by recession whereas de- 
mand for Mercedes cars has risen 
strongly and steadily. 

This is amply illustrated by 
the fact that last year care ac- 
counted for 48 per cent of Daim- 
ler's total DM65 -5bn turnover 
and the commercial vehicle 
operations for 27 per cent. In 
1979-80 the positions were re- 
versed. 

However, Dr Liener stresses 
that the diversification into elec- 
tronics and aerospace and other 
changes in no way signal a dimi- 
nution of the importance with 
which Daimler views the com- 
mercial vehicle operations. The 
vehicle but 


business is, 


and remains, one of the main- 
stays of our company. We are 
absolutely <tetermfned that this 
will remain the case in the fu- 
ture,' he says. 

Daintier has a 
commercial v eh i c le 
There are five factories in West 
Germany (at Mannheim, Woerth, 
Gaggena u , Dussddorf and Kas- 
sel) and production and assem- 
bly plants in Argentina, Brazil, 
Mexico, the US (where it owns 
the Fireigiailner company) South 
Africa, Nigeria, Spain, Turkey, 
Saudi-Aratna, Australia and In- 
donesia. 

Last year the group’s commer- 
cial vehicle output increased bv 
6 per cent to more than 228,000 
axia should increase again this 
year to about 235,000, still well 
below the peak 273,000 in 1980. 
Included in the 1986 total were 
118,100 tracks over 6 tonnes 
gross weight, giving Daimler 
world leadership and putting it 
well ahead of Isuzu of Japan 
with 100,890 and Ford, 92^50. 

The group has never sepa- 
rated, and probably never will, 
the financial results of the cars 
and commercial vehicle busi- 
nesses. Daimler’s rivals suggest it 
has been losing DMEOOm a year 
recently on its European heavy 
trade operations - a figure about 
which Dr Liener studiously 
avoids »nnirfng any comment. He 
does insist, However, that the 
commercial vehicle division aa a 
whole is profitable. 

Dr Liener argues that Daimler 
has made its contribution to cab- 
ting excess truck production car 
parity in Western Europe "bat in 
an almost invisible way” because 
much of the capacity has not 
been dosed down but used in- 
stead by the group for car assem- 
bly and car components. This 
has prevented redundancies 


year 


which otherwise would have 
been necessary. 

Dr Liener points out that 
Daimler is in a better position 
than any other manufacturer to 
Implement a global strategy for 
its commer cial vehicle business. 

This may mean integrating 
individual locations into an in- 
ternationally co-ordinated pro- 
duction structure in order to ex- 
ploit the advantages of location, 
or it may mean serving particu- 
lar markets with locafly-devel- 
vehkdes oriented to the re- 
markets." 

Picking up this theme, sales 
director Mr Schrempp says it 
might be possible, for example, 
for Daintier to Integrate produc- 
tion in. Brazil, Mexico and the US 
in some way. 

Daintier produces about 6,000 
vehicles a year in Argentina and 

50,000 in Brazil- "Brazil is inter- 
esting not only as a market but 
as a production site for sup- 
dying difficult export m arkets 
which we can no longer satisfac- 
torily serve from Germany - for 
example the Far East and the 
US,” Dr Liener says. 

The group has also made plans 
which should allow it to hold on 
in Malaysia where it is the sole 
remaining European track mak- 
er in an area dominated now by 
the Japanese. 

There seem to be few sacred 
cows the group would not be 
willing to sacrifice. Even its ded- 
ication to vertical integration 
and the production of its own 
key components - such as en- 

gearboxes and axles - is no J tax 
sa c ros anct 


Schrempp says: “If we can't land 1989. 


sell 100 per cent of a truck In a| 
country but could aril 20 per 
cent of a truck and make bucks, 
in future we will take the 20 per 
cent." 


Cash injection 


RENAULT Vehicuies bidustriefa, 

'the heavy truck part of the 
state-owned French group, is 
,likely to make a small profit this 
'year - the first time it has been 
in the black since it was formed 
from the merger of the Saviem 
'and Beriiez companies in 1974. 

new broomwho took over as 
chairman early in 1985, is one 
of schedule in his 
which en- 

^ >even in 1988. 

But he has had some help from 
the parent Renault group which 
imposed the break-even target 
■In June it pumped FFriLSbn of 

fresh capital into RVL found company, % Gras points new one. 

Most of the new cash has been out that at least RVI did not re- Renault re cently it want- 
used to reduce RVTs debts, thus ceive any hidden subsidies - ev- «d to take advantage-^ stock 
saving an annual FFWOQm in in- exythiog was out -in the open, market weaknesses to- increase 
terest payments. But the compa- unlike the situation in some othr its shareholding in the US cran- 
ny's debts remain high at more ex European countries. party by 3 per cent. 

At the beginning of the 1960s hi any case, Mr Gras says that 
RVI had too many people, too RVI has every intention af.tak- 
many production sites, invento- ing control of -Mack before the 
lies were too large, the subski- French group's ten-year option 
iaries in Spain and the UK ware 


other company, quoted on the 
bourse." He believes the banks’ 
involvement proves that RVTs 
projections of becoming profit- 
able in the near future are reli- 
able. 

To those who criticise the 
French government for indirect- 
ly subsidising its national truck 
Industry and propping up a mor- 


Mack contributed a profit of 

FFiSQrn. . 

Mr Gras says RVI should make 
more than FFrCQmfai the second 
half and Marie will continue to 
be profitable. 

luck has been going through 
its own ratiaouisaton pro- 
gramme including a move from 

an old-fashioned factory to a 


than FFr5bn. 

Another FFrSOOm was a down 
on the 42 per cent of 
Trucks of the US previous- 
ly held by the parent Renault 
organisation. 

At the same time, three of 
France’s leading commercial 
banks are investing FFr 400m 
each in RVI, either in equity 
warrant bonds or in equity war- 
rant secured loans. 

Both types of instruments 
eventually will enable RVI to be 
floated an the French bourse in 
what has been described as a 
"partial privatisation" of the 


announced the recap- 
italisation, Mr Raymond Levy, 
who took over as chairman of 
the Renault parent after the 
murder of Us predecessor Mr 
Georges Besse a year ago, said ft 
would restore RVI to a p os i t i ve 
net worth. 

He said he expected RVI, com- 
bined with Mack, to re 

tax Consolidated profits of at nanlt group. It has 
least FFrlbn a year during 1988 jxandal impact too. 


losing too much money, and the 
company was making too many 
of itsown components. 

Urgent steps had been taken to 
change - all this "but in Ranee, 
because of the system then, it 
was not possible to fire 5,000 sur- 
plus people overnight." 

Reshaping the group at a time 
when competitors attempted to 
take advantage of RVTs weak- 
ness to build up their share of 
the French truck market caused . 
huge losses - over FFrlbn a year 
- and the company eventually 
had a negative ’net worth of 
FFrl5bn to FFrfJObn and needed 
the capital reconstruction. 

Mr Gras believes it makes more 
for thft itftrff 

fust acquired in 1983 from the 
Signal Corporation, to rest with 
RVI than with the parent Re- 
nault group. It has a positive fir 


to do so runs out. 

Before the capital injection, 
RVI was already making consid- 
erable progress towards 
break-even by way of its cosfc- 


Mr Gras welcomes the invest- 
ment by the three banks - Ban- 
que Nationale de Paris, Credit 
Lyonnais and Sotiete Generate - 
because "we want to be like any 


RVI reported a consolidated 
net profit of FFrSOm for the first 
half of this year. RVI and its 
subsidiaries suffered a loss of 
FFrBOm (against one of FEY46Qm 
in the firet half of 1988) while 


This continues and by. the end 
of t.h<3 year the workforce will 
have .been reduced to 19,000 
from 231700 at the end of 1986. 
This , fallowed a cot of 2£60 jobs 
in 1985. 

The company has also been 
helped by better-than expected 
increases in vehicle production. 
In the first half RVTs output roae 
by 8.6 per cent to 24,720 vehicles 
and Mr Gras forecasts at least 

43,000 for the full year compared 
with 4L300 in 1986. 

Mack's first-half output rose 
from 7,025 to 8,-120 and it should 
also beat the 1986 production of 
21,000, he says. 

Of RVTs two major subsid- 
iaries, Spain will show a net 
profit this year, but Mr Gras does 
not expect the UK operations to 
break even until 1988. 

Three years ago the- Spanish 
subsidiary was In a financial 
mess. But the Spanish govern- 


ment provided money for a vol- 
untary redundancy programme 
which cue the wrork fo ree by 500 
to 2,000 to help the company 
along 5 k road to recovery- 
■ Some old-fashioned compo- 
nents used by the Spaotit nb- 
aidkij, such as cabs for heavy 
trucks, axe being replaced by 
modern ones supplied from 
France. In exchange the Spanish 
b becoming the sole 
of some components - 
as crankshafts - to the 
whole RVI group. 

As for the UK subsidiary, Re- 
nault Truck Industries, the re- 
covery programme, inaugurated 
last September at a time when 
there was some doubt if the com- 
pany had a future, te wril ahead 
of schedule and the. Dunstable- 
based concern has entered "a 
new, exciting phase in its histo- 
ry,” according to Mr Francis 
(Jourin, managing director. ... 

He says RTI, the former Dodge 
Trucks company in which RVI 
has Invested more than. &100m 
since taking over in 1981, has 
since June, for the first time in 
its history, been producing a net 
profit. 

Mr Cousin says the Dunstable 
factory is expected to make more 
than 5,700 trucks this year, up 
from 4,800 in 1986, and next 
year should see at least 6,000 
produced. 

RTI also is rapidly gaining ac- 
ceptance as a uK-based truck 
producer. 

RTI daims that its best-selling 
vehicles, the 50-series and the 
Commando models, have a 92 
per cent and 95 per cent UK 
content respectively. This year 
RTI will buy &60m of materials 
and components from 900 UK 
-suppliers. 

RTFs net loss last year reached 
SlOBm on a turnover of S848m 
compared with a loss of £7.6m 
on sales totalling &730m in 1985. 

Mr Cousin says RTI still has a 
long way to go but is well on 
course to make a net profit In 
1989 according to the recovery 
plan agreed last autumn. 


Scania 


Reaping the benefits 


SCANIA of Sweden is reaping 
the full benefits of the five-year, 
SKrlObn investment programme 
which enabled it to introduce a 
new range of tracks in the early 
1980s. 

The company this year will de- 
liver a record 31,000 trades to 
customers worldwide, beating 
the 1986 total of 25,300 by a 
handsome margin and expects 
another 5 per cent increase next 
year. 

Mr Georg Karmund, the chief 
executive, recently reported that 
Scania trade division's sales in 
the first eight months of this 
year were 19 per cent ahead of 
those for the same period in 1986 
ait SKrll^Tbn. 

This achievement is all the 
more considerable given the ex- 
tremely difficult conditions 
which have prevailed for the 
past two years in Scania’s big- 
gest individual market - Brazil. 

That country's attempts to 


stamp out rampant inflation 
with several, price freezes has 
had a dire effect on the Brazilian 
motor industry. While the 
multi-national vehicle 
groups have had to find ways (if 
subsidising their subsidiaries in 
Brazil, many component suppli- 
ers have not been able to cope 
with steeply-rising costs at a 
time of frozen prices. 

. The component and materials 
supply system ' in Brazil conse- 
quently has been in a parlous 


ere have 




my con 
simply 


refused to sup- 


“WeVethe 
Motor Industry's 
Worst-Kept Secret.” 

KJLLudvigsmMSAE 
Managing Dhriur 

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Bm^vhfacamipMliRniNi 

due m brfhxvd to lead dbaedy 
m profitable wloa 

'Industry Insight' comments on 
key issues /aring the motor industry. 
Phrase mpus: your copy. 

Ludvksen Associates Limited 

Saw 201 ] 05/100 New Bond 5met 
UmfcaWJYVLG England 
Trlc-phonc (01) *9.1 771 1 

F*amulr(QI]MI8W 

Tdna>l 37 bLOFBNOG 



ehicle assemblers have not 
been able to compensate by im- 
porting because' this is not per- 
mitted by the Brazilian authori- 
ties. 

Demand for heavy trucks In 
that country has been h igh as 
customers rushed to buy vehicles 
at unrealistically low, frozen 
prices. In more normal circum- 
stances Scania would have ex- 
pected to increase output and de- 
liveries in Brazil substantially 
this year. However, the company 
now says the best it can hope for 
is to hold sales at last years lev- 
el: 4, 

This will leave Brazil well 
ahead of the UK, where deliv- 
eries should be a little higher 
than the 1986 total of 2,493. 

Last year marked the 20th an- 
niversary of Scania tracks first 
going on sale in the UK bn that 
time the company has delivery 
more than 25,000 tracks to UK 
customers, 

Scania 's strategy has been to 
concentrate on the production 
only of heavy tracks at premium 
prices and, like its two main ri- 
vals, Daimler-Benz and Volvo, is 
an integrated vehicle manufac- 
turer and makes all its own en- 

g nes, gearboxes and axles so 
ey are carefully matched. 

The company has developed a 
modular system so that trucks 
can be built for various require- 
ments using a limited range of 
components. With this system as 
a base, new models can subse- 
quently be developed. 

This system was applied in 
particular to the 92-series models 
Scania introduced at the end of 
1984 to fill a gap In its range for 
higher-powered trucks and thus 
take advantage of a trend to- 
wards such vehicles in Western 
European markets. 

The modular construction pro- 
gramme has also enabled Scania 
to develop heavy trucks particu- 
larly for the US. The company 


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► registration details 

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► financial profiles of ma^ 

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set out In an easy-to-nsad format that enables you 
to assess at a glance trends and developments 
within the motor Industry. 

f^ta£S5/E^*r3!ifcsc*OTtofi^SUM(^8usriessQuarta^/SPOrtti- 
F&Mher intimation pbasocaSFkira Whntmad 


has came to the canctnakm that 
it needs to have a solid foothold 
in the UEL the world's largest 
single market far heavy trucks. 
If it la to prosper as an integrated 
track producer. 

Howe ver , whereas both Volvo 
and Daimler-Benz were able to 
acquire substantial existing. busi- 
nesses in the US (White and 
Freightliner respectively) Scania 
has had to buM operations from 
scratch. 

Efforts to find a suitable Amer- 
ican partner so far have xutpro- 
duced results, so in May 1985 it 
began its own trade distri b u tion 
venture In the US, assembling 
vehicles from, imported parts at a 
site near its bus plant in Orange, 
Connecticut. 

The compaxw knows It win 
take a long tune t o ma ke its 
mark with an unknown brand 
and integrated trucks in a mar-, 
ket where the vast majority of 
customers prefer to nominate' the 
engines, gearboxes and axles to 
belncoorporated in their vehicles. 

However, by tha end of last 
year Scania had 14 dealers in the 
north-eastern part of the US and 
expects to end 1987 with 21. The 
company is offering seven differ- 
ent moods in the US and last 
year delivered 155. "We antici- 
pate a gradual Increase in vol- 
ume in 1987," says Mr Claes To- 
ren, Scania’s export director. 

The .dealers are spread 
throughout an area from the Ca- 
nadian border, 'south to Virginia 
and west through Ohio to Indi- 
ana. Scania is Identifying niches 
where its trucks can be used in a 
relatively confined geographic 
area such as local haulage, bev- 
erages, petroleum, scrap Iron, 
quarries and particularly users 
who ate not in haulage but need 
trucks as tools for local 
operations. 

Scania last year also continued 
to expand its international or- 
ganisation by inaugurating a 
new import centre outside Mad- 
rid in Spain, a country which 
offers great potential now that it 
is pert of the European Commu- 
nity. 

unport company since when the 
number of dealers has doubted. 
Last year Scania track deliveries 
in Spain jumped to 650, an in- 
crease of more than 300 per cent. 

Europe as a whole accounted 
for 71 per cent of Scania's truck 
deliveries last year (down from 
73 per cent In 1985) South Amer- 
„ica 20 per cent (17 per cent) and 
other markets 9 per cent (10 per 
cent). 

Capital expenditure last year 
rose sharply from SKr 683m to 
SKr 903m but plants for the de- 
velopment ‘and production of car 
petrol engines and gearboxes for 
the sister Saab company absorb- 
ed SKr 182m (SKr 97m) of the 
total 

Developments included the ex- 
pansion of the. workshop at 
Gothenburg where manual gear- 
boxes are manufactured. 

In an effort to stimulate indi- 
vidual responsibility and develop 
technical skills, Scania Is organ- 
ising production In Sweden so 
that each manufacturing unit 
will be responsible for complete' 
sections of components. 


The Economist hrtoUIflenee Unit Umttsd 
Marketing Department (XWWLA) 

40 Duka Street, London W1A1DW 
Tot: 01-493 6711 TekHC 266353 


rarmThcEconomist 
LiUsU Intel ligaicc Unit 


As part of tills development, 
assembly of rear axles was trans- 
fered from SodeitaUe, the head- 
quarters site, to Falun where a 
complete axle workshop is bring 
established. Scania has estab- 
lished a truck cab plant at Oskar- 
shamn, a vehicle frame centre in 
Lulea and the component facili- 
ties are In Sodertatye. 


DAF TRUCKS of the Nether- 
lands today is twice the size it 
was a year ago but i» confidently 
expecting further substantial 
growth. 

. Acoording to Mr Aort van der 
Parft. chairman of Dai's manage- 
ment board, the company's track 
sales will increase at an annual 
rate of 4 to 5 per cent from about 
-30,000 this year. 

Output at its newly-acquired 
Freight Rover van facilities 
Eventually should rise to be- 
tween 40,000 and 50,000 vehicles 
-a year compared with about 

20,000 In 1987, onoe a new Sher- 
van range has been, launched, 
says. 

AH this follows the most mo- 
mentous changes in Dofs long 
and turbotent history. 

In April the company acquired 
Ley land Trucks and Freight Ro- 
ver from the UK government 
which accepted in exchan g e a 40 
cent shareholding in the en- 
Daf group. 

being one of Western Eo- 
rope’s smaller trank companies, 
Daf emerged as a group with a 
turnover of well over SI bn a 
year and ranked fifth id Europe- 
an track sates behind Daimfer- 
. Benz, Iveco, RVI and Volvo. 

The merger brought a compa-' 
‘e in the 


Daf 



More 
expected 


£ 


■er with one with a workforce of 
'6,500 in the UK. - 
V To make Ley land Trucks a 
(saleable company, the UK gov- 


iemment took .responsibility far 
|another major rationalisa t ion 
rogramme which cost about 


This is seen by the Govern- 
ment as good value for money 
because it has swapped a 
ny which until recently was 
jing £1 An a week for a minority' 
-shareholding In a group which. 


has been profitable from day 
rate. 

The Leyiand ratianaHsation in- 
volved the closure of the Scam- 
msll factory at Watford and the 
loss of another 2,600 Leyiand 
jobs; 1,400 at the engine and 
foundry facilities in. Lancashire; . 
nearly 600 at Scant tneli and 184 
at the ARdon axle ‘plant in Glas- 
gow. 

The links between Daf and 
Leyiand go back many years but 
had been reinforced in 1986 
when the Netherlands comj 
chose to use Ley land’s 
ner light trucks and Freight Ro- 
ver vans - in preference or those 
being offered by Mitsubishi of 
Japan - to expand the range of- 
fered by Daf s dealer ne twork in 
continental European markets. 

Paccar, the Heterfaalt and Ken- 
worth truck group of the US 
which owns Foden in the UK, 
was also in the running to buy 
' but Daf won the day; 
April, Daf has acted fast 
to reorganise its operations in 
the UK It has consolidated the 
22 former Daf dealers and 66 
Leyiand trade dealers into a 67- 
strong Leyiand Daf network, 
working swiftly to cut short the 
uncertainties such a programme 
involves. 

Those uncertainties were ex- 
pected to cause a temporary drop 


in the combined Leyiand and 
Daf truck sales in the UK But 
this did not happen, mainly be- 
cause potential buyers of Ley- 
land- trucks fed the company's 
future Is now more secure. 

Far some time it was obvious 
its previous parent, the state- 
owned Rover group, was desper- 
ate to sell Leyiand Trucks. Be- 
fore Daf came on the scene there 
were long negotiations with Gen- 
eral Motors which hoped to 
merge Leyiand with its Bedford 
subsidiary in Britain. 

Leyiand Daf has therefore 
been able to command about 25 
per cent- of the UK heavy truck 
market (over 3.6 tonnes gross 
weight) and is battling for lead- 
ership with Iveco Ford Truck. 

Mr van der Padrsays Leyiand 
Daf has secured 'a dominant po- 
sition at the top of the hard- 
fought UK truck market and, al- 
though there may be occasional 
monthly fluctuations, we will 
stay at the .top in the. future.” . 

The sales success and relative- 
ly buoyant demand in the UK 
market has enabled Daf to boost 
production at Leyiand ’b Lanca- 
shire facilities from 41 trucks a 
day in April to 66 a day. 

This output increase has 
helped towards a 10 per cent im- 
provement In productivity on 
the Leyiand assembly lines, an 


Improvement also achieved by 
the adoption of working prac- 
tices that are more flexible. 

Mr van der Padt believes that, 
although much has been 
achieved, it will take about three 
years for the organisational 
changes in the UK to be complet- 
ed -'mcliidtaig tiie switch of most 
of ScaznznriZa production to Ley- 
land - and five years before the 
group has a single, homogeneous 
truck ra n g e . 

The merger with Leyiand has 
taken the Daf management to 
full stretch because Daf was al- 
ready committed to launching 
this year a new heavy truck 
range, the 96-series, as well as 
starting the continental sales of 
light trucks and heavy vans. 

Further problems have been 
created because ^Truck demand 
has remained high in most Euro- 
pean markets and this -has left 
the Daf factories in the Nether- 
lands and Belgium working at 
near capacity. 

Mr van der Padt says he obvi- 
ously would prefer to complete 
the reorganisation in the UK 
against this upbeat background, 
and paints out that any future 
increase in production will main- 
have to be met by the Leyiand 


Since the merger much work 
has been done-on the Leyiand 


‘factory's future. Two options 
emerged and are currently being 
considered. The first was to con- 
. centra te all right-hand drive pro- 
duction in the UK and the other 
was to concentrate the build of 
some trade "families* in Britain. 

Daf will invest about £150m in 
the UK in the first five years 
after the merger, but more than 
half will go towards developing a 
new van range to replace toe 
current Sherpa models. 

In comparison with major ri- 
vals such as Daimler-Benz, with 
a worldwide output approaching 

200,000 a year and Iveco with an 
annual production of 100,000 ve- 
hicles, Daf remains a relatively 
-small company and Mr van der 
Padt says It wilJ be ss active as 
ever in seeking cooperative ven- 
tures. ' 

Daf hopes to find a partner or 
partners to share In the new van 
project. Among the companies 
already interested is Enasa, the 
state-owned Pegaso truck and 
bus company of Spaln- 

Enma and Daf already have a 
joint venture, Cab tech, which de- 
veloped and produces the heavy 
cab launched by both com- 
t h ls year - by Daf azt the 
trucks. 

Daf remains a private compa- 
ny but at the time of the Leyiand 
merger it stated its intention of 
gaining a stock market flotation 
in Amsterdam and London in 
two or three years. 

This would enable the UK gov- 
ernment, which owns 40 per 
, cent of the Netherlands company 
via the Rover group, to quit 
trudonakiiig for good. 

The rest erf the Daf shares are 
held by Daf Be h eer, a conn 
set up specially to hold ' 
per cent state. 


THE CALCULATED risk taken 
by Iveco, the Elat-owned group, 
in effectively assuming control 
of Ford's medium and heavy 
truck operations in the UK, 
seems- to be paying off hand- 
somely. 

Mr Giorgio Garuzzo, Iveco’s 
managing director, says' the. 
p will lift net profit by at 
20 par cent this year after 
more than doubling profit be- - 
tween 1985 and 1988. 

'AH Iveco's production compa- 
nies - Magirus in West Germany, 
Unlc in Fiance and those in Italy 
- are pr ofit able "and the profit is 
Increasing." 

The new Iveco Ford Truck 
company in the UK in which 
Iveco and Ford each have a 48 
per cait shareholding but Iveco 
haa management control and re- 
sponsibility fra- future products, 
has p erfo rmed better than antici- 
pated and Its 1987 loss, if any, 
will be sznalL 

Iveco was already Western Eu- 
rope's second-largest heavy track 
fadll- 
mar- 

adding toe. UK to the 
list last year. 

ing a perkxfof consolidatiiazfaf- 

ter going through an almost con- 
tinuous rationalisation process 
since 1979 when it was first set 
up. Production facilities in three 
countries had to be reorganised 
during the worst recession in the 
European truck industry since 
the war. 

But the opport u nity to move 
into Britain as a major truck pro- 
ducer was just too tempting. 

Last month Iveco aeteed anoth- 
er onca-ln-a-hfedme opportunity, 

one the management thought too 
good, to nuss. A. controlling stake 
in Aahok Leyiand, India's sec- 
ond-largest truck and bus pro- 
duce-, was put up for sale by the 
UK’s Rover Group. 

Iveco joined forces with Hin- 
dqja family, one of the most suc- 
cessful but controversial non-res- 
ident Indian entrepreneurial 
families, to bey Rover's 39 per 
cent shareholding in Ashok and 


Iveco 


UK move paying off 


61 per cent of the associated In- 
dian company, Ennore Found- 
ries, for about SB8m. 

Ashok has an output of about 
'16,000 vehicles a year and 30 par 
cent of the' Indian trade and bus 
market, holding second place to 
Telco, part of the Tata group. 
Ashok has technical links with 
Hino, the Toyota-dominated Jap- 
anese heavy truck company - but 
the betting must be that in time 
Iveco will take over this role. 

■ The deal, when completed, win 
give Iveco something its major 
rival Daimler-Benz so far has on- 
ly dreamed about - a substantial 
foothold in India’s truck and bus 
market 

This latest opportunistic move 
by Ivec o follows close behind Its 
emergence as a major force in 
the UK 

The new .UK' company, Iveco 
Ford Truck, started in June 1986 
with paid-up capital of &40m, 
most of which was spent to ac- 
quire Ford's factory at Langley 
where the Cargo truck range & 

produced. 

In the first six months Iveco 
Ford’s losses reached &22m, 
caused by three main factors: 

• The one-off expense of set- 
ting up the joint venture; 

• Tne write-off of capital ex- 
penditure associated with the in- 
troduction of Rockwell axles in- 
stead Of thOSe previously mad* 
by Ford for toe cargo range: 

■ jf'Pf £*5 retained 

AU finished stocks of Cargo 
tracks at the time of the take- 
over and therefore collected toe 
revenue from their sale, rather 
than Iveco Ford. Consequently. 

Ford's &48m turnover in 
the half-year was generated from 
fewer than 40 per cent of toe 
Ford trucks registered in the pe- 
riod. 

To cover the opening kieses. 


the two partners have injected 
.another S25m of cash. . 

This year, in an expansion fu- 
eled by the generally buoyant 
Eurqpratn demand for tracks, the 
rate of output at Langley has 
been raised four times - from 50 
trucks a day just before the 
merger progressively to 76 a day 
- and new employees taken on 
fra the first time since 1979. 

The factory has also benefited 
from an aggressive sales and 
marketing programme by Iveco 
Ford which has seen the compa- 
ny launch 19 new trucks or sig- 
nificantly different versions of 
-existing vehicles since June 
-1986, about half of them addi- 
tions to the Cargo range. 

Consequently, Iveco Ford has 
increased, its snare of every sec- 
tor of the UK track market this 
year and after nine months had 
leadership of the total heavy 
truck market (over 3.5 tonnes 
gross weight) with 10,200 
trations, ahead of T J 
with 9,935. 

Langley Is working overtime 
and its output is now expected to 
reach 14,800 vehicles this year 
compared with 11,995 in 1986. 

Mr Garuzzo says he is now 
more confident that Iveco Ford' 
can maintain truck production 
facilities in Britain when the 
time comes to change the pres-, 
ent range of Cargo models some- 
time in the 1990s. 

Iveco itself received new capi- 
tal this year. The Amsterdam- 
registered group was given 
FK50m (about *Sfcm) by IfaL 

Mr Garuzzo says this is an indi- 
cation of the importance flat at- 
tributes to the commercial vehi- 
cle sector in its strategic plans 
for balanced growth. 

The new money will be used to 
enable Iveco to continue a high 
•level of investment. He esti m ates 


capital Investment this year will 
Jump by between 50 and 100 per 
cent from F1261m in 1986. 

The inve st m ent is aimed en- 
tirely at improvements in quality 
and productivity, not capacity 
increases, Mr Garuzzo insists. 

Iveco’s research and develop- 
ment spending - written off 
against annual profits - will in- 
crease by 25 per cent from the 
FUG Im last year. 

Iveco, with its loss-making pe- 
riod behind it, did not need the 
new capital to restore its hnlanrj* 
sheet to health. In 1986 Iveco 


reported a net profit more than 
doubled from F1120m in 1985 to 
-F1284m and paid iu first-ever 
dividend, amounting to FKJGm. 
Turnover was unchanged at 
F19bn. 

Iveco's production of vehicles 
over 3Ja tonnes gross (excluding 
the Cargo range) fell last year by 
3.6 per cent to M^QO because an 
improvement in European de- 
mand was not enough to offset 
the sharp, downturn in the mar- 
kets outride Europe. 

The company is one of the 
world's major producers of diesel 
engines and last year turned out 
.266,000 - s per cent increase 
on 1986 - while output of forklift 
trucks -rose by 9 per cent to 
SJ5S0. 

Mr Garuzzo expects Iveco’s to- 
tal truck sates to increase by be- 
tween 4JXX) and 5,000 vehicles 
this year. 



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Financial Times Thursday November 12 1987 


COMMERCIAL VEHICLES 7 






***>“ ; . 



f \V 

*a '** 

--p*! 

■ ’ ■ 
: 




WBfrted LocMk l a c k ing a breakout 


MAN 


Better, if not 
yet in shape 


"MAN Commercial Vehicles, West 
Germany's second-largest heavy 
truck producer, has made a re- 
markable recovery from the fi- 
nancial crisis into which it 
plunged in the early 1980s. But 
*we still have a long way to go 


shape which we want to see it 
tackle the 1990s,* says Mr WOfr- 
ied Lochte, chairman of the ex- 
ecutive board. 

“In the past three years we 
have been able only to put about 
break even and stall have not 
succeeded in a dear and lasting 
earnings breakout,” he com- 
plains. 

The group has completed a 
reorganisation of Its production 
faculties, which Involved a 25 
per cent cut in the workforce, or 
6,000 Jobs, to 17,600, and is now 
concentrating its sales efforts al- 
most entirely cm Western Euro- 
pean markets. 

In MAN CV’s latest financial 
year - to the end of June - no 
fewer than 913 per cent of its 
total vehicle deliveries, or 21,510, 
were to West European markets . 

This was 'the' highest total 
achieved in Europe since HAN 
started to produce commercial 
- vehicles and compared with 88.1 
per cent of deliveries (19,263) in 
the previous 12 months. 

But MAN CV is stall haunted . 
by unexpected problems in terri- 
tories outside Europe. Its initial 
difficulties stemmed mainly 
from a decision by Iraq to caned 
without warning an order for 


already built because of the tight 
original delivery date. They woe 
not ordinary production models 
and were unsaleable in Europe. 
MAN had to dispose of them at 
well below cost. 

At the same time HAN CV, in 
common with the zest of the in- 
dustry, faced a r ec ession caused 
by tne steep drop in demand 
from the oil-producing countries 
and a halving of European sales 
between 1980 and 1982. 

But MAN CV acted quickly; 
and the reorganisation has cut 
the break-even level of output to 
15,000 - a level to which the 
company’s production dropped 
only once in the past 12 years. 

MAN CV’s truck production 
rose from 16,060 to 19295 in the 
fuutncisJ yea r to end -June, in- 
cluding 3.720 of the vehicles pro- 
duced jointly with Volkswagen 
(1,040 in the previous 12 
months). 

So in normal circumstances 
the company should have been 
reasonably profitable. However, 
It suffered extraordinary losses 
totalling DM 60m in two over- 
seas markets in the financial 
year. 

This prevented HAN CV’s bot- 
tom line reaching much more 
than break-even and it could not 
improve on the DM 6.66m net 
income for 1985-86, Mr Lochte 


Detailed financial results will 
be given by the parent MAN 
group next month but it is al- 
ready clear that the extraordi- 
nary write-offs for overseas 
operations are behind the com- 
pany, he says. There will be a 
‘‘noticeable improvement" in the 

results for the current financial 

y«r- . ^ 


the truck market in Turkey, 
where MAN CV has invested in 
three plants, collapsed by almost 
half overnight. 

The situation was not helped 
by the lack of demand from Iran 
and Iraq, two territories which 

MAN CV supplies from Turkey 
where wage raxes are one tenth 


of those in West Germany. 

In the US, where MAN CV has 
a bus assembly plant at Cleve- 
land, North Carolina, the compa- 
ny won ft $65m contract to sup- 
ply more than 400 dty buses to 
Chicago and began to prepare for 
production. 

But the federal auth ority re- 
fused to authorise the essential 
financial support for the Chicago 
Transit Authority and the order 
was cancelled at the last mo- 
ment. 

At present the bus plant em- 
ploys 300, is producing one boss 
day compared with the capacity 
of four a day. However, an order 
for 107 city buses from St PanL 
Minnesota, has been placed and 


This is an top of capital expen- 
diture running at DMJSOm a 
year and a similar amount. .for 
research and development, a 
“normal” level of spending which 
the group must maintain. 

Mr Lochte forecasts that 
MAN’S vehicle sales In the 
1987-88 financial year will reach 
23,000, Including 5,000 of the 
joint-venture MAN-VW medium' 
trucks, 16,000 heavy trades ami 
2.000 buses. 

He says: “We expect to in- 
crease production, turnover arid 
keep the plants fully employed' 
for the third successive year.” 

Kenneth Qoodbsg 


VOLVO Truck Corporation of 
Sweden has twice taken advan- 
tage of the weakness of domestic 
producers in the US to drive de- 
terminedly into that market 
which is so important to its glob- 
al amb itions. 

As a result, the company has 
become the second-largest pro- 
ducer of heavy trucks in the 
world, with a forecast ou tp ut of 
vehicles over 16 tonnes gross 
weight this year of 52,000 com- 
pared with the 72,000 predicted 
for Daimler-Benz, the Mercedes 
group, and Navistar’s third-place 


Volvo has taken advantage of a weak market 

Powerful push into the US 


All this has happened very 
quickly. In 1981 Volvo paid S75m 
for the assets of the bankrupt 
White Motor in the US, including 
three factories (in Virginia, Ohio 
and Utah) and then spent anoth- 
er *75m to put the White organi- 
sation back into shape. 

Then this year Volvo agreed to 
take over the US heavy truck 
operations of General Motors, toe 
world's biggest automotive 
group. 

Volvo takes full responsibility 
for the combined company, 
called Volvo GM Truck Corpora- 
tion - in which it has a 76 per 
cent shareholding - from Janu- 
ary 1 next year. 

The importance of this latest 
aggressive move cannot be over- 
estimated. -Volvo Truck m ja pur- 
suing the clearest and boldest 
strategy of any truck manufac- 
turer in the world. Its intonr^ 
position 18 years from now, and 
the path via which it fatendw to 


reach it, has been plainly hM 
down,” says Mr JbhnLawBon, an 
assistant director at the Nomura 
Research Institute in London 
and one of the best-respected ob- 
servers of the industry. 

"The accelerated commitment 
to the US market raises the 
stakes for Volvo’s competitors 


who have yet to declare a strate-' 
gy of riobahsatfon,” he adds. 

Mr lawson also predicts that 
Volvo will not repeat what its 
management sees as errors of 
past mergers by procrast i nating, 
on the unification of product 
ranges. “Volvo, White and GM 
products will move rapidly (fiat 
is within three to four years) to- 
gether, although the two result- 
ing ranges wfilstm offer custom- 
ers a choice between the 
European integrated track con- 
cept and the customary US prac- 
tice of specification of propri- 

et Behind ^Svo^Trock'fl posh in- 
to the US is its implicit belief 
that it must produce all the key 
elements in a truck’s driveline 
(engine, gearbox, axles) "because 
that makes for a better, more 
effective truck.”' 

On the other hand, Mr Sten 
Langenius, president of Volvo 1 
Track, suggests: There is no 
way an integrated producer can 
be viable without a presence 
both in the US and Europe to 
spread the development costs 
over bigger volumes of output.” 

However, he admits It wul take 
a long time to reap full r eward s. 
“Only in the long term will we 
be able to introduce Volvo com- 
ponents to US trades. It might 
take eight to ten years, ft might 
take forever." ' 

In the meantime, Volvo now 
has an *»unaiy viable business 
in North America - even if moat 
of the trades use other compa- 
nies' components. 






Volvo's F16; following ■ path laid down 


. GM joined with Volvo because 
it was unwilling to put up the 
money to replace its ageing, 12- 
year-old American heavy trade 
range in view of the expected 
low rate of growth in demand it 
expects in the States for the fore- 
seeable future. 

The merger gives the new 
joint-venture company a poten- 
tial US heavy truck market share 
of 17 per cent -although Mr Lan- 
genlus expects penetration to 
chop bade initially because man- 
agement will have to give so 


much attention to the reorgani- 
sation. 

Last year Volvo sold 12,820 
trucks in the US of which 11,200 
were buOt there. GM produced 
and sold about 10,000 heavy 
(Class 8) trucks. 

Mr laayaiiM announced last 
month that Volvo GM Trade will 
spend about $100m to reorganise 
production in the US. In essence 
this will centralise production, 
moving capacity from GM’a 
track at Pontiac Michi- 

gan, to the Orville, Ohio, facility. 


now a cab assembly plant, which 
will be expanded to assemble 
GMC Brigadier trades - the only 
salvageable model from the GM 
range. 

Most of the investment will be 
spent at the existing main plant 
at New River Valley in Virginia, 
and associated warehousing. 
There will also be a facility to 
handle 2,000 imports. 

Mr Langenius says that in the 
long term the capacity at Volvo’s 
.existing plants will be doubled 
from tne current 12,000 a year 
but, as a first step, capacity will 
be lifted by between 20 and 25 
per cent. But no decision has 
been made yet about the timing 
of the closure of heavy truck 
operations at GM's Pontiac plant 

Volvo GM has selected about 
240 dealers from the combined 
network of 520. About 140 of 
that number will sell Volvo GM 
trucks exclusively, representing 
a significant strengthening of 
Volvo's US network - it previous- 
ly had only about 60 exclusive 


As normal in the US, the selec- 
tion of deale r* has left some of 
those dropped from the franchise 
feeling bitter and threatening to 
-take Volvo and GM to court. In 
any event, some compensation 
wifi have to be paid to those 
dealers who have been dropped 
but Mr Langenius insists that for 
Volvo “this won’t be too expen- 
sive.” The bulk of the outlay will 
be required to buy bade stocks of 
trades and spare parts. 


Sales of Volvo trucks in the US 
have fallen marginally so far this 

r r but partly this was caused 
shortages of supply of some 
popular white moods, and also 
because vehicles have been di- 
verted to Oanpd H where GM deal- 
ers have started to sell Volvo 
tracks in the initial phase of a 
separate Volvo-GM joint venture 
in that country. 

From virtually no sales at aD, 
Volvo expects to sell 1,000 tracks 
in Canada this year. 

Mr Langenius says that, con- 
trary to some rumours, the 
joint- venture company will prob- 
ably keep the Autocar Trucks 
name that Volvo acquired with 
White’s assets, “because it is a 
good name in the US.” 

Looking at Volvo Truck's total 
operations, Mr Langenius says 
that its plants in Europe and tne 
US are currently working at frill 
capacity. This will more than 
compensate fra: the effects of a 
26 per cent drop in demand in 
Australia and Brazil and the al- 
most total absence of sales in the 
Middle East. 

He estimates Volvo is likely to 
produce worldwide at least 2,000 
more trucks this year than the 
44,400 In 1986 (figures which ex- 
clude the GM heavies). 

Of the 1966 total, Volvo assem- 
bled 14,100 Volvo trucks in 
Sweden'; 12,800 in Beldam; 
11,200 in the US and 6,300 in 
other countries. 

Mr Langenius remains optimis- 
tic about the group’s financial 
performance. "Over the past five 
years we have taken many ag- 
gressive decisions. We have to 
see some results of this in our 
profit." 

Volvo Truck will certainly im- 
prove on last year’s operating 
profit of SKrlfiTbn, he predicts. 

Kenneth Gooding 


recently received the necessary 
federal appro vaL 
MAN Gv has for the time be- 
ing shelveda scheme to assemble 
and sell the VW-MAN joint ven- 
ture medium trucks in the US - 
the D-mark-dollar rdationshi 


proposition. But it has a 
toehold for its. track technology 
in the States because ft is to sup- 
ply General Motors, the worms 
largest automotive group, with 
technology and components for 
high - mobili ty military vehicles. 

It also has a joint-venture to 
produce truck axles with Eaton 
and as part of the deal the Amer- 
lean company will distribute 
MAN CV’s axles in the US. 

Mr Lochte hopes to sign more 
cooperative ventures in Aituve, 
essential for a company of MAN 
CV’s size he believes. 

It has been equally essential to 
swing MAN Cv s mam sales and 
marketing thrust away frami 
markets in the Middle East, once 
the compa ny ’s main export terri- 
tory, and Africa and towards Eu- 
rope. 

The reorganisation of MAN CV 
'haft taktarptafe at various levels. 
The company's foil into losses -I 
DM 477m in - the two years -to I 
June 1984 - convinced itxpaxent, 
GHH, the major West German 
angfoasring group, , that a tighter 
grip was needed. So GHH 
swapped a 75 dot cent sharehold- 
ing m the MAN parent group for 
full comroL 

The trad and boa operations 
were then split off as a sep ara te,. 

nrf>frlHr^\wvuv) onlidfHftvw 


The new MAN CV company is 
in the final stages of rationaKs-i 
ing its production facilities. In 
Austria the Graf and Stift subsid- 
iary will dose its Fforisdoxf fac- 
tory at the begbting of next year, 
and concentrate all bus and 
trade assembly at a new factory 
at Liesi n g, near Vienna. 1 

MAN CV has taken over front, 
another MAN company the' 
pressings plant at Gustavsborg, 
complete with, its 1,000 employ- 
ees. which will offer frame parts 
and sheet metal components to, 
outside customers as well as pro- 
viding than for MAN vehicles. ] 
Another change has seen all 
production of the 6 to 10-tonne 
trucks developed jointly by VW 
and MAN Cv moved to MAN’S 
Salzgitter factory. Previously, 
output was split between Salzgit- 
ter and VW*s Hanover plant. 

Output, of the joint-venture ve- 
hicles, which so far have proved) 
a disappointment to both part- 



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i- 




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tr? ; | . *•' • 

1 ’ i 's 

. 


V. 


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1 *““***£; 

^ i 

i hi 


nets, will be boosted in coming 
years by a deal with Enasa, (he 
state-owned Pegaso group of 
Spain. 

MAN CV believes it can. sell 
between 1,000 and 1,500 a year 
in Spain, some through its own 
impart company and shout 600 
with Pegaso badges on them. En- 
asa has estimated that ultimately 

demand for the trades in Spain 
could reach 2,000. However, Mr 
Lochte says there are no immedi- 
ate plans to have the joint-ven- 
ture vehicles assembled in Spain. 

MAN CV has also conducted 
the reorganisation of its distribu- 
tion arrangements throughout 
Europe. In West Germany and J 
Austria it controls distribution 
and also has many company- 
owned sales and service outlets 
becked by independent, au th o r - 1 
Ised service centres. 

In the other West European 
countries, MAN either controls 
its own import companies or 
uses the local Volkswagen im- 
porter. • 

This gives MAN 800 sales and 
service points throughout West- 
ern Europe and it aims eventual- . 
ly for L000. Heavy spending on 
the distribution network wfU, 
continue for some years. - 


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. V-.' . S t , 

• V 


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Running costs kept at 0°C 


Since purchasing their first Mercedes in 1931, the 
financial climate for Scotia Frozen Foods trans- 
port cosls has become brighter and brighter. 
“Each vehicle nearly always goes out at its maxi- 
mum load” says Bob Rankin, Transport Manager, 
"and they're all making 35-40 drops a day. And as 
Scotland isn’t exactly a flat country, that’s hard 
work. But our Mercedes more than cope. 
"Because they're so predictably reliable, I'm able 
to plan and work to tight monthly budgets which 


was impossible with previous manufacturer's 

vehicles. 

“For instance, our 1114’s have a total running cost 
of 28. 7p per mile which includes maintenance, 
fuel, oil, tax and tyres. And 13.2 - 14.00 mpg is 
more than acceptable in this terrain. 

“Of the 26 Mercedes we operate the one main 
failure was a rear axle on a 5080 which had 
covered 125,000 miles, and here the other half of 
the Mercedes equation, the back-up, really 


showed. Our dealer, Western Automobiles, had 
the replacement part the next morning and the 
vehicle was back on the road after that. Quite 
simply, operating Mercedes makes my job a 
damn sight easier." 

Cold facts about Mercedes-Benz. 


MERCEDES-BENZ 



METICULOUS ESSINIIBIIS ’ MATCHLESS SUPPORT • M A X I M U M E C 0 N 0 M Y 


iamnM»«BNZ(Mncs>BMUOiauwrsD 


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vrn* 


Financial Times Thursday November 12 1987 


( COMMERCIAL VEHICLES 8 ) 


Manufacturers are working hard to make the driver’s life easier, says Alan Bunting 

Technology taking away the arm and leg work 




Jffk-.- 


HEAVY TRUCKS, like cars, ate 
becoming easier to drive. Tech- 
nology is taking away progres- 
sively more of the physical effort 
of driving vehicles which, for ev- 
eryday haulage operation, can 
now have an all-up weight of 38 
tonnes. 

Power-steering, compressed sor 
braking and servo-assisted clutch 
are long-established features 
which, with increasing permitted 
weights, have become indispens- 
able. In the last two or three 
years truck manufacturers' ef- 
forts to eliminate further the 
chores of driving, on ever more 
congested roads and where deliv- 
ery scheduling is ever more criti- 
cal, have taken a new direction. 

Acknowledging the need for 
every driver to remain alert to 
possible hazards arising on the 
road ahead of him, truck design- 
ers have striven to eliminate 
those driving functions which 
distract as well as create fatigue. 

Gearchanging ergonomics in 
part icu lar have come in for dose 

Eliminating those 
distractions 


study. Most imported trucks 
have synchromesh gearboxes 
which simplify gearchanging, in 
that the clutch pedal need be 
depressed only once for each 
shift ZF from Germany is the 
main supplier, though Volvo and 
Scania from Sweden and Renault 
from France produce their own 
in-house designs. 

Unfortunately the synchro- 
mesh mechanism increases gear- 
lever effort considerably. Adding 
servo ggaigtam** alone to reduce 
shift effort is not realistic be- 
cause it would invite abuse, and 
gearbox durability would suffer, 
though Volvo and ZF in particu- 
lar have refined synchroniser de- 
sign to minimise the effort the 
driver has to exert with his left 
arm. 

Most British-built heavy trucks 
have simpler constant-mesh 
gearboxes of essentially Ameri- 
can design, from Eaton or Spicer, 
on which lever effort is minimal, 
but which demand a greater lev- 
el of familiarity and skill from 
the driver. 

Double-declutching is neces- 
sary, for some downchanges at 
least, though it must be said 
that, with experience, most driv- 
ers are able to make upchanges, 
and even some downshifts, with- 
out using the clutch at alL 

Electronics are now coming to 
the driver's aid in reducing the 


chore of gearchanging. Through 
the use of a microcomputer and 
rotational speed sensors on the 
input and output sides of the 
otherwise standard gearbox* ful- 
ly-powered gearshifung is feasi- 
ble without risk of excessive 
wear or damage to either the 
clutch or the gearbox 

Scania was the first manufac- 
turer to offer such a system, 
known as CAG (computer-aided 
gearchanging) to be followed by 
SfT Eaton and Mercedes-Benz. 
All are based on the same con- 
cept though with differing em- 
phases and electronic refine- 
ment. 

Eaton’s SAMT system, for ex- 
ample, eliminates use of the 
clutch pedal except for starting 
away. Its “black box” sends In- 
structions to the accelerator dur- 
ing downshifts so raise engine 
speed so that the speed syn- 
chronisation needed for a 
smooth change is achieved mare 
rapidly. 

1 have driven SAMT -equipped 
MAD and ERF heavy trucks at 
38 and 40 tonnes gross. Both had 
a small spring-return finger-tip 
flick switch in place of the usual 
hefty gear lever, so that arm as 
well as leg exertion is all but 
eliminated. 

Mercedes’ EPS (electro-pneu- 
matic shift) system, applied as it 
happens to a proprietary ZF 16- 
speed gearbox, employs the same 
principles, using compressed air 
power - readily available cm all 
heavy trucks from the brake 
tem - to do the work, but ui 
the safeguard of electronic con- 
trol. 

When I drove an EPS-fitted 
Mercedes 16445 38-tanner recent- 
ly I found the system - standard 
on top Mercs - more acceptable 
than some of its rivals to those 
drivers apprehensive about get- 
ting to grips with gadgetty. 

The change switch is made to 
look like a normal gearstick, 
though for up and down-changes 
it is moved simply backwards 
and forwards. Ana the clutch 
pedal- is used normally for all 
shifts. 

Scania's CAG system is very 
similar, though the change lever 
has no pretensions to be other 
than a switch: and the Swedish 
company adopts a different mar- 
keting approach, offering CAG as 
an extra-cost option right across 
its range of trucks and buses. 

ZFs powers hift developments 
have yet to be adopted for com- 
mercial Bale, though MAN has 
done a lot of work on _ 
installations and {dans' to 



easyshifting available to those 
buyers who opt for ZF in prefer- 
ence to Eaton gearboxes. 

Ironically, most of the develop- 
ment to cut gearchange effort 
has been at the heavy end of the 
truck weight spectrum; vehicles 
axe for the most part covering 
long distances, typically on mo- 
torways. Once on the move, gear- 
changes are few and far be- 
tween. 


Much more fruitful a 
Hems would be found on 
trucks - those employed in urban 
distribution, where delivery pat- 
terns and traffic congestion in- 
volve frequent use of the gear- 
lever and dutch. 

Unfortunately, buyers of distri- 
bution vehicles are far more 
price-sensitive than the average 
38- tonne artic user. The on-cost 
of any form of automatic or 


semi-automatic transmission is 
proportionately greater and is 
harder to justify for, say, super- 
market distribution work. 

The brutal truth is that in 
spite of plusher and more 
omically -designed cabs, wf 
come as standard, fleet operators 
remain reluctant to pay fear ex- 
tras when the prime beneficiary 
, is the driver. 

Another way to cut the gear- 


shifting element in dr i vers* fa- 
tigue Is to reduce the frequency 
of ratio changing. Engines with 
more horsepower and torque 
bring performance flexibility at 
lower rotational speed. Down- 
changes can be postponed longer 
on rising gradients or in thfeken- 


ranks of trade manufac- 
turers offering engines of more 
than 400 horsepower in 88-tonne 


rtiaada were joined last month 
by Volvo, whose new F16 range 
of chassis boast# the most power- 
ful track diesel yet seen on the 
British market Its 16 litres ca- 
pacity produces over 450bhp, ov- 
ertaking Mercedes, at 435hp, 
Scania at 420hp and Fiat-Iveco 
at about 406hn. 

Rivals like DAF and MAN, 
whose biggest available power 
units- fall short of the "magic* 


400hp, claim that journey times 
and productivity do not, in 
tice, because of legal speed j 
and traffic considerations, bene- 
fit from such excessive power. 

It cannot be denied however 
that the easy “loping* perfor- 
mance conferred by the latest, 
tuaaaively-powerful engines con- 
tributes benefits for the driver 
which stand alongside those of 
eesy-shift transmissions. 



-'**-.■.'"7 •**. •' \ v\ 
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Financial Times Thursday November 12 1987 


SECTION BZ: 


FINANCIAL TIMES 




A decade's economic 
development has ; 
brought affluence and 
increased contact wjth 

advanced nirttens, . 

writes Bob King. Political reforms 
since the end of martial law are likely 
to continue, whjle the lifting of the 
ban on visits to China may lead to 
open trade or even investment there. 



the giant 


THE OLDEST Chinese classic, 
the I Ching, insists that change 
is the natural order of the uni- 
verse. If so, then Taiwan today Is 
well in tune with -heaven. 

- For just over a year, major re* 
forms in the political, economic, 
financial, trade, and social 
realms have held centre stage, 
and there are no signs that the 
tide of reform will ebb in the 
near future. If anything, reforms 
are likely to accelerate: . 

While changes are occurring 
right across the spectrum, politi- 
cal reforms are commanding 
most of the attention. In July, 
the government of president 
Chlang Ching-kuo ended 38 
years of martial law, and in the 
process lifted a ban an the for- 
mation of new political parties. 

Last month Mr Chiang’s gov- 
ernment also moved to defuse 
tension with arch-rival China by 
permitting visits there by Tai- 
wan residents, and by giving the 
first formal approval to indirect 
trade with the mainland. 

Such actions stand out in con- 
trast to past practices. While 
much of the world has in the 
past few decades turned its back 
on the Nationalist government in 
Taipei, and instead recognised 
Peking as the le gitima te ruler of 
all China, . Taiwan him refused to 
budge Grom its claim to sover- 


eignty over the mainland. It has 
insisted on having no dealings or 
contacts with China, and said 
the threat of invasion or subver- 
sion by the mainland justified 
continuing martial law. 

That tended to isolate the is- 
land internationally, however, 
and to a large extent slowed its 
political evolution. Even just a 
few years ago, people 'outside 
Taiwan were apt to dismiss the 
country as just another dictator- 
ship propped up by US support. 
The Nationalist Party was wis- 
ing to sacrifice its international 
image in return for the image of 
legtthnacy such a stance provid- 
ed at hone. 

Instead, the government con- 
centrated on developing Tai- 
wan’s economy and increasing 
its citizens' material well-being. 
In the late 1960s, Taiwan started 
to crank up its export industries, 
and in the mid-1970s, Mr Chlang, 
then premier, lent his weight to 
a series of legal and infrastruc- 
tural reforms to facilitate this 
emerging opportunity for eco- 
nomic development. 

Changes began coming even 
faster with Mr Chiang's Section 
as president in 1978, and were 
orthr temporarily side-tracked in 
1978. by the US's recognition of 
the People's RepubHcas the sole 



CONTENTS 


The economy: is vulnerable 
through its continued heavy 
reBance on exports 
Trade; the surplus with the US is 
second only to Japan's 2 

Investment why the Government 
wants the people to place more 
money abroad 


xnent took perhaps its biggest 
step in 40 years: it decided to 
end a ban on visits to China by 
Taiwan residents. By so doing, it 
left itself open to suggestions 
that it was abandoning its lung* 
held policy of "no contacts, no 
negotiations and no compromise' 
with the Chinese communist re- 
gime. The Government solved 
that dilemma, at least on paper, 
by stating that the visits were 
for ‘humanitarian’ purposes - al- 
lowing exiles to visit families 
they hod not seen since 1949; 
ana by barring from the pro- 
gramme active-auty servicemen, 
civil servants, and anyone with- 
out immediate relatives in Chi- 
na. 

Verbal m umbo-jumbo aside, 
however, it is dear that the de- 
cision to allow visits, as well as 
the recent formal approvals giv- 
en to indirect trade with China, 
mark an obvious shift in Tai- 
wan's stance regarding the com- 
munist regime. 

That is not to say. however, 
that Taiwan is cosying up to Pe- 
lting for an early unification on 
communist terms. Indeed, the 
common wisdom on Taiwan in- 
dicates just the opposite: the 
powers-that-be have decided to 
enlarge their programme of Tai- 
wan-as-showcase beyond the 
mere trappings of material 
well-being and mouthings of de- 
mocracy into a substantial chal- 
lenge to Peking. “This is "what 
you must provide for the billion 


you must provide for the billion 
people of China before we can 
talk about unification,’ Taipei is 


Tbe government of PresMeat CttiMg CMngJan (above) 


ruler of all of China. Tbe US 
almost immediately established 
the American Institute in Tai- 
wan (AIT), to handle unofficially 
affa irs previously undertaken by 
its embassy, ana eased fears that 
Washington, to further its rela- 
tions with Petting, was prepared - 
to let Taiwan go down the (bain. 

Economic development has ac- 
celerated during this decade. Ex- 
ports have increased yearly, and 
the country's annual trade sur- 
pluses have brought foreign-ex- 
change reserves to nearly 
US$7ubn, the third-highest in 
the world after Japan and West 
Germany. The Taipei skyline is 
now marked by cosmopolitan 
high-rises amid the hodge-podge 
of architecture of' previous de- 
cades, and the Taiwanese have 


amassed cars, video players and 
apartments and fat savings ac- 
counts. 

But 'affluence and increased 
contact -with- advanced nations 
also. made the Taiwanese aware 
of conditions in other countries, 
and ensured that the days of 
stringent controls on politics and 
personal expression were num- 
bered. Increasingly, the political- 
ly-minded chafed at the restric- 
tions imposed by martial law. 
They also sought a more rational 
approach to the question of com- 
munist China. 

The continuance in power of 
the Nationalist Party, composed 
at top levels of. people who had 
fled the mainland with Mr 
Chfang Kai-shek in< 1949, 
brought political and economic 


id 38 yam* of martial law 

.stability. But the Parly’s monop- 
■ qly on power also created terv- 
: sions between the ruling elite 
and the politically-minded na- 
■' tive-bom, who, according to 
many estimates, make up four- 
fifths of the population 
Martial kw prohibited the for- 
mation of new political parties to 
challenge Nationalist rule, and in 
any event parliament and the 
national assembly were stacked 
by ageing Nationalist partisans 
elected on the mainland in 1947 - 
who cannot be replaced until 
free elections can be held in 
their constituencies on the main- 
land. Taiwan’s opposition moved 
quickly once the Government 
had announced its intention to 
end martial law a year ago. A 
group of prominent opposition- 


ists quickly announced that they 
. had farmed the Democratic Pro- 
. greesfve Party, and the Govem- 
. ment quietly overlooked its tech- 
nical illegality. 

All of a sudden, previously ta- 
boo subjects are out in the open. 
Opposition parliamentarians 
openly harangue the Govern- 
ment over the so-called "ten- 
thousand-year parliament’ and 
official policy on contacts with 
mainland China. -The opposition 
has taken to the streets m mostly 
non-violent protests on a number 
of occasions - which only a year 
before would probably have in- 
vited a severe crackdown by the 
authorities. The formal lifting of 
the martial decrees took place on 
July 15 of this year. 

Then, last month, the Govem- 


bespite diplomatic ties with 
only 23 countries, Taiwan still 
functions as an independent na- 
tion, with no dependency on 
China other than the occasional 
Chinese trade plums that fall in- 
to its lap through Hong Kong 
and other entrepots. 

But this is where the picture 
obscures: western values and log- 
ic do not necessarily apply, and 
the Taiwan authorities remain 
vociferously opposed to indepen- 
dence for the island, whatever 
its substantive status in the 
world. Pragmatic reasons for this 
stance abound: Peking has stat- 
ed, for instance, that a move to- 
ward independence by Taiwan 
would cause it to use force 
against the island; locals fear 
that foreign nations, out of def- 
erence to Peking, would refuseto 
recognise the Republic of Tai- 
wan'; and the Nationalist gov- 
ernment, whose raison d’etre re- 
mains its claim to unifying 
China under its own terms, 
would- lose credibility - and pow- 
er. 

Viewed in these terms, Taiwan 
is in for continued reforms 
across a wide spectrum and in a 


Banking: the factors that are 
producing a push for reform 3 

Industry: In a time of transition, 
the inefficient can no longer 
expect protection 

Profiles of leading industrialists 
A guide for the business visitor 4 


relatively-short period. It seems 
clear, for instance, that Taipei 
will not be able to limit visits to 
China to simply those ageing 
partisans who came over with 
the remnants of the Nationalist 
government in 1949. Nor should 
it wish to; behind the stated "hu- 
manitarian* intent lies the 
awareness that visits to China by 
a broad spectrum of Taiwanese 
society will bring the message to 
the mainland that a Chinese al- 
ternative to ’socialism with Chi- 
nese characteristics’ is alive and 
well in Taiwan. Such visits will 
also serve to reinforce the Na- 
tionalist Parly's status on Tai- 
wan. because visitors to China 
will be able to view at first hand 
the enormous disparity in the 
quality of life between the two 
sides of the Taiwan Straits. 

The Government may even 
tacitly approve more direct trade 
deals or even investments in Chi- 
na, despite its current formal 
prohibitions. Again, such ar- 
rangements could bind the main- 
land more closely to Taiwan's 
developmental path, and in the 
process serve as a natural market 
for Taiwanese manufactured 
goods, an inexpensive processing 
centre for lower-end products, 
and a source of basic materials 
that resource-poor Taiwan lacks. 

On the home front, political 
diversification will also continue. 
Already, the Democratic Progres- 
sive Party, however small in the 
number of elected representa- 
tives it can claim, is often called 
on to consult with the majority 
Nationalist Party over pending 
legislation and policies. 

A splinter group of the DPP 
also recently formed the Labour 
Party, nominally aimed at ad- 
vancing the rights of workers. In 
all, Taiwan will probably evolve 
into a multi-party state similar 
to, say, West Germany, rather 
than a two-party configuration 
such as that m the US. 

Political parties aside, the Tai- 
wan- bom, rather than the Na- 
tionalist partisans who accompa- 
nied the government into eme 
38 years ago, increasingly domi- 
nate government posts. These 
native-born people lack the emo- 
tional attachment to China that 
still marks their mainland-bom 

Mrchiang, who began the pro- 
cess of ’Tarwaxusation’ - bring- 
ing more native Taiwanese into 
key government positions while 
he was premier - has, for in- 
stance, confirmed as his succes- 
sor vice-president Lee Tenghuei, 
a Taiwan-born agricultural econ- 
omist. A clear-cut succession is 
necessary to ensure that the pro- 
gramme of Mr Chiang, who at 77 
has long been ailing, will con- 
tinue unhindered. 



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Trade 


Currency moves fail 
to reduce surplus 


THIS HAS been a frustrating 
year for Taiwan in its efforts to 


reduce its trade surplus with the 
US. which, is now the second lar- 


US, which is now the second lar- 
gest such surplus after that of 


Even according to Taiwan's 
conservative statistics, the sur- 
plus last year hit a record 
USS13.6bn. w Its wake, the Gov- 
ernment of President Chlang 

Ching-kuo has been moving to 
open up the economy to import- 
ed goods and services and to re- 
value the new Taiwan dollar. 

But despite a currency appreci- 
ation of over 25 per cent in the 
past two years, and progressive 
moves to reduce tariffs, the bilat- 
eral trade surplus has continued 
to grow. 

In the first nine months of this 
year it reached a record ll<L5hn 
as exports grew 28.6 per cent to 
Sl7.7bn_ Imports grew at a faster 
34.6 per cent clip but from a 
very low base which produced a 
total of only $5J2bn. US figures, 
meanwhile put last year’s total 


at Sl5.6bn, implying that it could 
reach S20bn this year. 


reach S20bn this year. 

The result has been a consider- 
able embarrassment to the Gov- 
ernment, which claims it has 
done more than most other 
Aslan countries to correct its 
trade imbalance. 

Last month the Government 
announced further tariff cuts av- 
eraging over 50 per cent on 3JI34 
separate products, ranging from 
anti-pollution equipment to foot- 
wear. 

"We have done much more 
than South Korea,' says Mr Au- 
gustine Wu, Deputy Director of 
the Board of Foreign Trade. 
Economists estimate that, once 
Implemented, these cuts will re- 
duce the average nominal tariff 
to 13 per cent from 19 per cent. 

There are a number of reasons 
why the measures taken so far 
have failed to work their way 
through, they add Despite the 
lower tariffs, the economy is still 
slewed towards exporting, with 
tariff rebates for re-exported 
components and widespread inv- 
port-licensing requirements. 

Other factors Include acceler- 


Fairly soon some of these fac- 
tors will disappear, and by the 
turn of the year, according to 
Economy Minister T H Lee, the 
surplus could be an a declining 
trend 

For the time being, the consen- 
sus in Taipei Is that US bilateral 
pressure on trade has eased off, 
despite the increased surplus. 
Negotiation now focuses on spe- 
cific technicalities rather than 
broad issues of market access. 

Taiwan had always hoped that 

the pressure would ease as it 
opened its markets to imparts 
and allowed its currency to ap- 
preciate. 

Some In Taipei now argue that 
further appreciation of the New 
Taiwan Dollar would simply 
erode the competitive position in 
which US exporters to Taiwan 
now find themselves compared 
with their counterparts in Japan. 
With Its Large S69hn holdings of 
foreign reserves, Taiwan’s hand 
is also stronger than it was. 

Though government officials 
decline to make such threats ex- 
plicitly, both sides know that 
most of these reserves are placed 
in dollars with US banks and In 
US Government instruments. 
The reserves are now so large 
that US financial markets could 
face substantial volatility if Tai- 
wan ever decided to switch sys- 
tematically out of the dollar. 

Throughout Taiwan's trade 


policy runs a strong thread of 
bilateralism. Mr Wu unashamed- 
ly admits that Japanese firms are 
not allowed to bid for public sec- 
tor contracts, and imports of Jap- 
anese cars are restricted. Now 
Taiwan is also courting Europe 
in an attempt to reduce its ae- 
pendancy on the US. 

Taiwanese exporters have tra- 


no one denies that at some point 
the limit of tolerance will nave 
been reached, with severe conse- 
quences for an economy that is 
dependant on exports for half its 
output 

One reason why the Govern- 
ment has been willing to acqui- 
esce so readily in market-open- 
ing measures and in currency 
appreciation has been Its own 
recognition of the need to drain 
excessive liquidity from the 
banking system and to promote 
industrial restructuring after 
years during which the currency 
was seriously undervalued. 

Officials In Taipei are inclined 
privately to sneer at US residents 
who 'drive Japanese cars and 
buy counterfeit Rolex watches". 
But soch harsh words belie the 
fact that failure to turn the sur- 
plus round is as much of an em- 
barrassment to Taiwan as it b to 
the US. 


dltionally neglected Europe in 
the past, but two-way trade has 


ated buying by US Importers, 
fearful of further currency ap- 


f earful of further currency ap- 
preciation, as well as hedging by 
exporters of foreign currency 
revenues in the forward foreign 
exchange market and some tem- 
porary switching of orders from 


unrest there earlier 


luring thi 
rlier this; 


the past, but two-way trade has 
now begun to grow in the wake 
of the appreciation of the local 
currency. Last month the Gov- 
emmment sent its first major 
buying mission to Europe with 
orders worth SlJZbn in its pock- 
et. Imports from Europe, mostly 
of luxury cars and fashionwear, 
have begun to grow rapidly. 
Those from Britain have doubled 
this year, albeit from a very 
small base. 

Mr Wu points out that this is 
in stark contrast to the behav- 
iour of US exporters, few of 
whom, be says, show much real 
interest in selling to Taiwan. 
This adds to the fear locally that 


Peter MoHlHipimi 




EVERGREEN INTERNATIONAL CORP. 

r<.«,^-c3.S405£~ 


!> - S "f* 


Financial Times Thursday November 12 1987 


TAIWAN 2 







'm 


US trade pressure on Taiwan, 
may resurface as the Administra- 
tion in Washington seeks to de- 
flect protectionist trade legator 
tion now being debated by 
Congress. 

The US still has a number of 
items on its shopping list, nota- 
bly liberalisation of Taiwan's 
heavily protected form sector. 

It has successfully managed to 
prise open the market in several 
service sectors, such as fast food 
and insurance, and has won con- 
cessions for foreign banks. These 
are now allowed two branches in 
Taiwan instead of just one. 

Yet Washington also wants 
further measures to open the fi- 
nancial sector to foreign compe- 
tition, such as the right for US 
banks to set up local credit card 
operations. It is also seeking to 
close loopholes In the local copy- 
right and patent law as well as to 
liberalise cargo-handling services 
at Taiwan's main port of Kaohs- 
hang. • 

One fear is that the US may 
by to reinforce these demands 
by threatening to reduce or elim- 
inate trade concessions granted 
to Taiwan under its generalised 
system of preferences. Further 
strong upward pressure on the 
New Taiwan dollar may become 
inevitable if the trade figures do 
not improve. 

So far Taiwanese exporters 
have surprised everybody with 
their resilience and adaptability 
in the face of appreciation, but 


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Shops testify to Tehran's prosperity, bet the economic c S m ot e may change 


The economy 


Reliance on exports cannot last 


TO A CASUAL observer of the 
Taiwan economic scene, it must 
appear as though thi« is a coun- 
try where the good times go on 
for ever. 

For the second year in a row, 
real growth in 1987 is expected 
to reach about 11 per cent Per 


Taiwan — Key Economic Statistics 


capita gross national product is 
forecast to rise to USSo.000, put- 
ting Taiwan in the top league for 

living standards in Asia outside 
Japan. 

Yet these glowing results mask 
the fact that the structure of Tai- 
wan’s economy remains serious- 
ly distorted. Most local econo- 
mists believe the country is 
poised to undergo a painful res- 
tructuring to reduce Its depen- 
dence on exports that trill bring 
inflation, and possibly even re- 
cession, in ifo wake. 

For the moment It Is hard to 
Imagine such a scenario far a 
country where manufacturing is 
booming, where foreign ex- 
change rese rv es at $69bn are ex- 


I— IgewftW 
Consumer price k 
Exports mSSbnl 

famorts jUSHm) 

Urania swphi 


Indeed, Taiwan has been lucky 
that these problems have not 


come to the fore already. Appre- 
ciation of the New Taiwan Dol- 


cfation of the New Taiwan Dol- 
lar by more than 25 per cent 
over the past two years has had 


only a limited effect on export 
competitiveness because it has 


ceeded only by those of Japan 
| and where Inflation Is almost 
non-existent. Consumer prices 
rose by just one per cent in the 
year to August, while - wholesale 
prices actually fell by 0.5 per 
i cent. 

I Lurking close to the surface. 


competitiveness because it has 
also reduced the {nice of impart- 
ed raw materials, while export- 
ers have been able to hedge 
against the effect of currency 
movements in the forward for- 
eign exchange market 


imilarly, low import prices 
I tariff reductions have 


however, are pressures which 
could change all this. Taiwan's 
economy is vulnerable through 
its still heavy reliance on exports 
which make up about half Its 
GNP. Its banking system is 
awash with liquidity - the key 
M1B money supply has been 
growing at an annual rate of 
over 40 per cent - which, coupled 
with the boom in stock market 
‘and real estate values, could 
translate sooner or later into 
steep upward pressure on prices. 


and tariff reductions have 
helped keep inflation at bay. 
Though wage costs have risen 
sharply, unit labour costs have 
been held down by increased ef- 
ficiency. 

Mast economists believe, how- 
ever, that it is only a matter of 
time before these temporary ad- 
vantages slip away, forcing Tai- 
wan to confront its fundamental 
economic problem. According to 
Dr Chen Sun, President of the 
National Taiwan University and 
a noted economist, today's heavy 
dependence on exports is unsus- 
tainable over the medium term. 


Shifting to a more balanced 
economy with greater emphasis 
on domestic consumption will be 
politically . difficult, however, 
and may not be passible without 
severe economic dislocation and 
recession. 

Evidence abounds ' on the 
streets of Taipei that .Taiwan is 
finally shaking off the siege- 
economy mentality that has 
dominated habits since its foun- 
dation. 

Foreign cars, mostly European 
models, are appearing in large 
numbers. Smart, marble-fronted 
fashion boutiques are appearing 
In the city’s otherwise rather 
dingy neighbourhoods. Consum- 
ers are dearly taking advantage 
of the easing of restrictions on 
imparts. 

ui a psychologically important 
move, the Government also de- 
cided this summer to lift ex- 
change controls, so that individ- 
uals are now allowed to invest 
$5m abroad each year. 

Yet Dr Sun believes that all 


the stark differential between its 
40 per cent savings rate and its 
investment rate which is only 
half as high. 

Balanced growth In the econ- 
omy would call far these two 
rates to begin converging. Yet 
this is hard to see, given, the 
magnitude of the numbers in- 
volved. Taiwan's trade surplus, 
which Mr T H Lee, the Economy 
Minister, says will be S20bn this 
•year and only to SlSbn 

in 1988, makes up 20 per cart of 
GNP. 

In relative terms, the adjust- 
ment facing Taiwan Is thus far 
greater than that confronting Ja- 
pan. Looking at the trade sur- 
plus, Dr Sun says bluntly:*! don't, 
see how we can spend all this 
money on consumption or in- 
vestment within two or three 
years." At the very least, he coor 


projects take a long time to get 
under way. 

Moreover, Mr Lee insists that 
improved welfare programmes 
are not desirable. “It’s easy to 
start social benefit programmes, 
but once begun there is no way 
to cut them back.* Taiwan's 
aversion to budget deficits 


means that higher government 
spending would eventually also 


eventually also 


imply an increase In the current 
very low personal taxation rates. 


"1 see very few people who pro- 
pose that the Government 
should have more resources for 
that purpose,* Dr Sun says. 


tinnes, it will require a major 
shift of resources away from the 


this will have only a marginal 
impact on the economy. Tal- 


lin pact on the economy. Tai- 
wan’s real problem, he says, is 


shift of resources away from tire 
private sector and into the hands 
of the Government. Many people 
In Taiwan would welcome such a 
change if it meant increased gov- 
ernment spending to improve 
the quality of life, reduce pollu- 
tion and enhance welfare and 
education services. 

Yet the government of Presi- 
dent Chiang Ghing-Kuo remains 
deeply averse to deficit spending 
which might have inflationary 
consequences. Mr Lee says it is 
prepared to ran a deficit on capi- 
tal account, but not where cur- 
rent spending is concerned. 

■finding the money is not a 
problem; the problem is how 
quickly can we start up proj- 
ects," he says. Complications 
over land acquisition and Tai- 
wan’s traditionally cumbersome 
budgetary planning process 
.mean that most infrastructure 


that purpose, Dr Sun says. 

This, then, is the dilemma fac- 
ing Taiwan. On the one hand it 
must reduce the economy’s vul- 
nerability to recession and pro- 
tectionism In the US, which 
would curtail its export activity. 
On the other, H cannot easily do 
so quickly, and certainly not 
'without risking inflation and 
economic dislocation as domestic 
industries such as construction 
are favoured at the expense of 


General as s um ptions are that 
growth will begin to drop next 
year as these problems become 
prominent. Even the almost in- 
domitable optimism of the Tai- 
wanese is now tinged with a de- 
gree of unease. 

Mr Robert Parker, a US trade 
lawyer based in TapeL says: 
There’s enormous inherent 
strength In this economy. It ab- 
sorbs blows that many people 
think are going to cripple it. 
Time after time it demonstrates 
an extraordinary resilience, but 
tiie danger Is to assume that, giv- 
en this resilience, It can absorb 
any blow.” 


PstorMontagnon 


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TAIWAN 3 


The Government wants the people to invest abroad... the people are reluctant 


Market drop may spur outflows 


TAIWAN’S DIFFICULTY In man- 
aging its international capital 
flows is a good example of the 
old rule that things never seem 
to happen in precisely the way 
that governments would like. 

Taiwan wants its citizens to 
begin investing more abroad.. 
Unfortunately they - and foreign 
investors too - have until recent- 
ly been more beguiled by what b 
happening at home. 

Alter much soul-searching, the 
Government finally decided in 
July to lift foreign excha n ge con- 
trols and allow individuals , to re- 
mit remit up to US$5m abroad 
for investment purposes each 
year. The hope was that an or- 
derly outflow of investment 
would drain the domestic econo- 
my of excessive inflationary li- 
quidity and slow the embarrass- 
ing rate at which the Central 
Bank had been accumulating for- 
* eign exchange reserves. 

in the event, the response has 
been minimal- Taiwanese . inves- 
tors have not been rushing to 
send their funds abroad, and re- 
serves have continued to grow, 
reaching $68bn as of mid-Octo- 
ber. 

Bankers say there are three 
main reasons why this 1ms hap- 
pened. The first b that expecta- 
tions Of continued local currency 
appreciation have debarred indi- 
viduals from sending' money 
abroad The second is cultural: 
there are very few. institutional 
investors in Taiwan, and individ- 
uals lack the experience and 
ability to invest overseas. Third 
appropriate channels for them to 
do so are Mill teclringeven if 


they wanted to. 

Taiwan's new-found wealth 
has attracted investment bankers 
to Taipei like bees round a honey 
pot. Among the latest arrivals 
this autumn was Sheazson Leh- 
man. W.I.Carr and James Capel 
are planning to join the throng, 
but even long-established houses 
like Jaidine Fleming are still not 
allowed to customer ac- 

counts. All they can do is offer 
Investment advice. 

Eventually, in line with a 
long-awaited revision of the local 
securities law, this will change. 
But some bankers expect that 
they will be forced to set up joint 
ventures with local securities 
companies before they can be- 
come fully operational. Ur Philip 
Fang, of Taiwan’s Securities and 
Exchange Commission, says re- 
ciprocal access for local firms to 
foreign markets may also be a 
condition. 

Four trust companies - Inter- 
national Investment Trust, 
Kwang Hua Securities, National 
Securities and China Securities - 
which already run small inward 


funds for foreign investors are 
meanwhile seeking authorisation 
to launch cutwara funds as wefl. 

They am, however, expected to 
be limited to US*40m apiece, a 
drop in the ocean compared with 
the potential onflow. In the ab- 
sence of further development of 
trust business, Ur Fang believes 
that local investors will continue 
to show only limited interest 

Seeking advice from a strong- ’ 

er, as local Investors now have to 
do when dealing with foreign in- 
vestment banks, b alien to the 
Chinese character, he says.' 
"They simply don’t, believe some- 
one rise's ability to make deci- 
sions for them.* 

Some bankers, in Taipei specu- 
late that the Government may 
not be entirely unhappy with the 
slow response to the lifting of 
foreign exchange controls. Up 
till the last, many in government 
were ambivalent about what was 
regarded as a momentous deci- 
sion. 

It represents a fundamental 
break with Taiwan’s' inward- 
looking financial past, and there 
was considerable "nervousness 
ahead of the derision about its 
impact cm financial markets. 

The fact that further institu- 
tional, as well as Cultural, change 
is needed before the move begins 
to bite may help both the Gov- 
ernment and the marketplace to 
absorb ref cam more gradually. 

In any case, local investors 
found the local stock market 
much more interesting at least 
until it began to fail last month 
along with other world markets. 
Though only just over 130 stocks 
are actually feted, turnover has 
generally this autumn exceeded 
that of Bong Kong and Singa- 
pore combined. The Taipei Stock 
Exchange Index peeked at a ley- 





Banknote* stacked eafely be hi nd a Taipei bank 
many people’s savings may aoen nest abroad 


el of 44573.14 on October 1 and 
subsequently nose-dived by some. 
2,000 points, although it remains 
nearly three times its level at the 
start of the year. 

In the wake of the fall there b 
now some doubt about the previ- 
ous general assumption that the 
underlying trend was still up- 
wards. Demand for Taiwanese 
stocks has been driven, above 
all, by excess liquidity in the 
banking system and that has not 
changed despite the collapse on 
Wall Street. 

Loc&l brokers confess to a de- 
gree of bafflement oyer where 
the market may be headed next. 
.There is no sign yet that disillu- 
sion with the local market is 



SON D J F M 
1986 


A M J J A S O 
1987 


prompting an outflow of funds, 
and m any case there are few 
'attractive international opportu- 
nities avaiulable to investors at 
the moment. 

However, some believe a 
period of stock market stagna- 
tion, coupled with some stability 
in local currency markets, might 
encourage investors to begin 
looking abroad, which in turn 
would produce the moderate out- 
flow of funds for which the Gov- 
ernment has been looking. 

The lack of sophistication of 
the local investing community 
remains a dominant characteris- 
tic of the market Ur David Hsu, 
of Jaidine Fleming, says individ- 
ual investors, who make up the 
bulk of buyers, ‘hut buy any 
stocks. They don t even know 
the name.” 

This makes the stock exchange 
vulnerable to rumour and panic, 
of the kind that forced October's 
dramatic decline in the index. 
Some argue that the 5 per omit 
daily limit on price movements 
only makes matters worse, be- 
cause it leads to the conspicuous 
accumulation of unsatisfied or- 
ders. 

Moreover, generally low ac- 
counting standards and the fact 
that many listed companies are 
etill basically family -controlled 
lay the market open to abuse. Mr 
Fang says it is very difficult to 
obtain a con victim an insider 
trading. Same bankas say the 
SEC itself is understaffed and 
still relatively inexperienced. 

According to Mr Benny Hu, 
President of China Securitise 
and a former senior executive of 


Bankers Trust in the US, the 
stock market has never really 
been regarded by Taiwanese 
business concerns as a source of 
long term capital. 

Businessmen raise their own 
capital through savings or bank 
borrowing aim turn to the finan- 
cial markets only for- their 
short-term needs. This explains 
why the stock market is under- 
developed in contrast to the 
more sophisticated markets for 
bankere acceptances, commer- 
cial paper and certificates of de- 
posit. 

Also, he adds that local inves- 
tors are only just waiting up to 
the difference between savings 
and properly-managed invest- 
ment. ‘we’re not used to the 
ri8k/retum concept yet," and too 
often investors atm talk In terms 
of guaranteed return. 

The Government appears to be 
having more success in promot- 
ing two-way direct investment 
flows. Mr Hi Lee, Deputy Direc- 
tor of the Industrial Develop- 
ment and Investment Centre, 
says the Government is keen to 
promote both inward and out- 
ward direct investment, to se- 
cure markets, technology, re- 
sources and so that we can 
upgrade our products.” 

So far the outflow is still hesi- 
tant. Only one company, the 
elctronics concern Tatung, 
which has a plant in Tetfcwyn 
the UK, has invested in Europe, 
for example. But expectations 
are growing that the pace will 

S t rapidly following the 
>f restrictions this sum- 
ward investment, which 
totalled US$844m during the 
first eight months, compared 
with S700m for the whole of 
1966, is already rising strongly. 

The gap, therefore, lies in the 
domestic financial market. Most 
bankers agree that Taiwan needs 
an efficient capital market that 
can handle local as weD as inter- 
national Investment needs 
smoothly if it is to build on its . 
Industrial success. Its people will 
have to learn to become inves- 
tors and exporters of capital 
rather than just manufacturers 
and exporters of goods. 

For most societies this is nor- 
mally a lengthy process, but in 
Taiwan's case the problem is 
that the wealth to create such a 
market is already there. Its fi- 
nancial planners know they 
have to steer through a revolu- 
tion in practical ana cultural at- 
titudes to investment. But given 
the prese n t archaic structure of. 
the market and the inexperience 
of its users, they also know they, 
have to keep it under control. 

MarMontatfiOfi j 


Banking 


A strong push for reform 


FEW PLACES, it seems, are im- 
mune from the winds of change 
in banking these days. T aiwan, 
where pressure for a new univer- 
sal banking structure is growing 
apace, is certainly no exception 
In part such pressure is the 
inevitable result of the failure of 
the banking system to keep pece 
so far with Taiwan’s dramatic 
development as an industrial 
economy. In port it is simply the 
echo of reform taking place else- 
where. Together these factors 
have combined to produce a 
strong push for reform. 


According to Dr Kuo-Shu Li- 
ang, Chairman of the Chong 
Hwa Commercial Ba n k, Taiwan 
is already reasonably well ad- 
vanced in the deregulation of in- 
terest rates. Now he says the 
time has come far institutional 
.change as well, to break down 
the old divisions between com- 
mercial end investment banking 
and broaden the market for au 
Institutio ns 

Mr Edward Chian, Executive 
Vice-president of the .Hua Nan 
Commercial Bank, adds emphati- 
cally: ‘All institutions are 


SPA 


Strategic Planning Associates 


INTERNATIONAL MANAGEMENT 
CONSULTANTS 


STRATEGY DEVELOPMENT 
COMPETITIVE POSITIONING 
ACQUISITIONS DIVESTITURES 
RESTRUCTURINGS 
PROFITABILITY IMPROVEMENT 


WASHINGTON, DC 
TEL: 20Z-7787000 


looking to widen the scope of 
their business. The government 
is looking forward to lowering 
file fences. We are going to see 
more liberalisation because that 
is the trend.” A major catalyst 
for banking reform has been the 
presence of 33 foreign banks in 
Taiwan, which as a group have 
been seeking so-called natio n al 
treatment from the Taiwanese 
authorities. National treatment 
would put than on the same reg- 
ulatory footing as local Institu- 
tions 

In practice this bofia down to 
freedom to open more branches 
in Taiwan. At present foreign 
banka can have only one branch 
in Tape! and another in the 
southern - port of Kaohsiung. 
They also want to ran credit 
card operations, an easing of 
capital and loan/asset require- 
ments, and, most important at 
all, the freedom to open trust 
and savings departments. This 
would taring with it entitlement 
to engage in term tending in the 
real estate market with a maturi- 
ty longrir than the presently pre- 
scribed limit of seven years 

The whole question of banking 
reform has been, taken up by US 
trade negotiators as part of their 
attempt to open up Taiwan's ser- 
vices sector to foreign competi- 
tion, but according to Mr James 
Vaughn of American Express 
Bank, “we are not trying to ap- 
ply pressure through the US 
trade negotiators.* Reform of the 
banking system is an inevitable 
consequence of the lifting of ex- 
change controls this summer,, he 


. Parallel to the pressure on the 
foreign banks have come s im i l a r 
demands for change from the lo- 
cal banking community itself. 
Only five Taiwanese banks are 
licensed to run, trust operations. 
Others are applying to do the 


same. Trust companies want 
more freedom to take deposits 
from the public, and foreign in- 
vestment banks want full trust 
li cences 

But while the demands are 
clear, the response of the author- 
ities is shrouded in uncertainly. 
No one knows for sure what is 
permitted and what is not, and 
for foreign banks in particular ft 
has become a question of feeding 
their way gingerly with the au- 
thorities. Says Mr John Brinsden 
of Standard Chartered: ‘The 
rules are deliberately left flexi- 
ble- .Everyone is pushing the reg- 
ulatory boundaries to their elas- 
tic limits, especially where the 
capital market Is concerned.* 
The arguments in favour of re- 
form are clear, particularly 
where consumers of banking ser- 
vices are concerned. It would 
bring them freedom of choice in 
what has up till now been a very 
limited market. It would also fos- 
ter the development of the kind 
of modem capital market that 
Taiwan needs if it is to secure 
long- term benefits from its in- 
dustrial success - 

Yet reform, when it cornea, is 
likely to bring a shakeout in its 
tr ain . Mr Philip Fang of the local 
Securities ana Exchange Com- 
mission notes that granting li- 
cences to local banks to operate 
in the securities market might 
lead to excessive competition 
and conflict with the banking 
law, When it happens, it Is likely 
that banks will have to handle 
such business through separately 
capitalised gnbalrifanes, he says 

Fears that reform would sim- 
ply lead to unequal competition 
between sophisticated foreign 
banks and their inexperienced 
local counterpart s seem ' over- 
stated, however. Foreign banks 
do have modern products, ready, 
Confined tm page 4 


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Now eyes are turning toward 
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The government is responding«with 
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The result is a dynamic change in 
the Taiwan economy that your 
company cannot afford to overlook. 
Whether you’re buying or selling, let 
us help you take an all-new look at 
the opportunities that await you 
in Taiwan, ROC. 


BOARD OF FOREIGN TRADE 

Ministry Economic Affairs, 

1, Hu Kou Street, Taipei, 10741 Taiwan, R.O.C. 

Tribe 11434 BOFT. CABLE: BOFT Taipei. Telefax: (02) 3513603 




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IV 


Financial Times Thursday November 12 1987 


( TAIWAN 4 ) 


jndustmntransjto 


No more protection 
for the inefficient 


TAIWAN'S INDUSTRIES are be* 
ing forced to grow up. after years 
of coddling by the Government 
and active wooing by interna- 
tional buyers who, year after 
year, plopped lucrative orders in- 
to manufacturers' labour-inten- 
sive laps 

That Is all over now, and those 
manufacturers who thought the 
good days would last forever 
suddenly find that yesterday is 
gone. 

To begin with, the New Tai- 
wan dollar is not what it used to 
be. The Government allowed the 
it to remain undervalued as an 
incentive to the island’s export- 
ers, who traditionally have sup- 

S lied about half of Taiwan's 
NP. Over the past two years, 
though, the currency has risen 
from around NT$40 to US$1 to 
about 30:1. That 25 per cent ap- 
preciation has delivered a rough 
blow to marginal producers of 
widgets and the like, who lack 
the financing and the savvy to 
make their operations more effi- 
cient ■ = - ■ ■ 

Cheap labour is gone, too. 
Wages in Taiwan have been ris- 
ing on average by 10-12 per cent 
since the beginning of the de- 
cade, and buyers are now mov- 
ing to other developing coun- 
tries, such as Thailand, the 
Philippines, Indonesia, Malaysia 
and Sri Lanka, in search of the 
bargains that Taiwan used to of- 
fer 

Finally, the Government has 
given notice that it will no lon- 
ger protect inefficient industries 
through high tariffs and other 
trade barriers. Tariffs on many 
items have in fact been falling 
drastically over the past couple 
of years, and a recent proposal to 
cut duties on about 3^00 items - 
roughly 81 per cent of the goods 
on Taiwan s tariff schedules - 
will, when approved by parlia- 
ment next year, bring average 
import duties from the present 
20 per cent to 12 per cent 
Dr George Yang, the US-edu- 
cated chairman of the Industrial 
Development Bureau, which 
helps set industrial policy, pre- 
dicts that over the next year Tai- 
wan's tariff schedule will, on 
average, fall into line with those 
of developed nations. 

'Protection of industries 
should be phased out according 
to a timetable, and now that we 
have the approval of the cabinet, 
the Industrial Development Bu- 
reau is going about it," he says. 
“In the future, if we need to fos- 
ter an industry, well use educa- 
tion, research and development, 
information that includes better 
planning, and financial tools in- 
stead of protectionism.' 

Dr Yang estimates that within 
the next 12 months tariffs on 
basic materials will fall to 0 - 5 
per cent, on intermediates to no 
more than 10 per cent, and on 
downstream products to a maxi- 
mum of 20 per cent. A year from 


now, no industrial imports will 
be dutied at more than 30 per 
cent, he adds. 

This spells bad news for local 
manufacturers, most of whom 
have been ignoring several years 
of government warnings that in- 
dustries would have to upgrade 
or perish. Many manufacturers 
have simply continued to rely on 
orders tailored by foreign buyers 
to their capabilities - and costing 
structures - without referring to 
long-term strategic studies or 
even common logic 

Export figures for this year 
still paint a rosy picture for Tai- 
wan's industries, however. Over- 
all, exports during the first nine 
months were up by more than 39 
per cent over even last year's 
stellar performance to 
US439J5bn. When calculated in 
terms of Taiwan dollars, the gain 
was still an impressive 18 per 
cent year-on-year. 

But those figures do not reflect 
what is happening to industry on 
the micro-economic level. For in- 
stance, the head of the Taiwan 
Textile Federation, which over- 
sees Taiwan's textile exports, in 
October told the US Congress 
that 196 manufacturing firms 
had closed so far this year, be- 
cause their products were no lon- 
ger competitive at the height- 
ened level of the local currency. 

In fact, textile companies that 
can afford It, or that have 
connections elsewhere in 
are moving their operations 
shore to nations whose cost 
structures are similar to those in 
Taiwan 20 years ago. 

For instance, fabric manufac- 
turers, whose output traditional- 
ly has been aimed at Taiwan's 
own garment makers, have over 
the past two years started relo- 
cating their low- and mid-end 
production in south-east Asian 
nations that are just beginning 
their own apparel industries. 

Shoemakers, too, have started 
to export components to other 
parts of the region - including 
arch-rival China - for assembly 
in order to remain competitive. 
At the same time, many manu- 
facturers are upgrading their 
production facilities in Taiwan - 
exactly what the planners have 
in mind. Raymond Chuang, sales 
manager of Chia Her Textiles, 
says his company has computer- 
ised its operations from filament 
production right through to fin- 
ishing of fabrics. 

According to Chuang, those 
manufacturers who have not 
opted to move their production 
onshore hive instead begun in- 
vesting in new high-speed weav- 
ing facilities to remain competi- 
tive. Others are beginning to 

E reduce more high-end goods at 
ome while moving their low- 
end production offshore. 

The footwear industry, Tai- 
wan's third-largest foreign ex- 
change earner after electronics 
and textiles, has also seen the 


writing on the wall for the low- 
end items that helped it achieve 
its present success. To force 
manufacturers to produce shoes 
with more value-added content, 
the Footwear Association actual- 
ly imposed a global expat quota 
on Itself. The argument is sim- 
ple if the export numbers are 
limited, manufacturers will start 
making higher-end shoes with 
higher profit potential. 

The pressure is on other sec- 
tors, too, with more emphasis on 
computers and related inforroa- 
' tion products these days than on 
traditional consumer items. Lo- 
cal papers have reported that 
: some makers of lower-end prod- 
, ucts such as radios and tele- 
phones are trying to postpone 
- the inevitable by moving produc- 
tion to mainland China. 

But at the same time, govern- 
ment statistics show, export sales 
of information products and 
components reached US4l.85bn 
during the first seven months of 
this year, an increase of 80 per 
cent year-on-year. The informa- 

■ tion industry thus accounted for 
| 33 per cent of the total $5.65bn 
! worth of electronics exports dur- 

■ mg the period. 

For companies that lack the 
foresight or the financing to 
shift their activities upmarket a 
• number of notches, however, the 
transition can be painful, and 
government planners admit they 
expect a noticeable degree of so- 
cial disruption before Taiwan's 
industry settles comfortably into 
its new niche 

The Government has set as its 
goal an industrial structure radi- 
cally different from the one that 
has over the past two decades 
carried Taiwan's economy to its 
current heights. That means 
higher technology, increased 
spending on R & D, forays into 
new areas such as biotechnology, 
and an end to protection of local 
industries through tariffs and 
the like. 

AH these changes do not sit 
well with some traditional man- 
ufacturers. Indeed, the Govern- 
ment has had to contend with 
what one official described as 
“vested interests’ in carrying out 
even the most obviously re- 
quired reforms - and clearly, 
more such confrontations will 
occur in future. 

“Some inefficient, marginal 
firms will go bankrupt,” says Mr 
Chuang Ylh-chyi, a London- 
School of Economics graduate 
who now works in the economic 
planning council's sectoral plan- 
ning department. 'But to up- 
grade, we're prepared to allow 
inefficient firms to weaken.. 
We’re already, hearing com- 
plaints from some firms, and in 
the shot term it will be very 
hard for our country. But its 
necessary.” 

Bob King 


Bob King profiles some of the people who give Taiwan business life its special Quality 


Towards banking reform 


Continued from page 8 
as Mr Vaughn puts it, to take off 
the shelf but the mostly state- 
owned local banks have much 
broader reach through their ex- 
tensive branch network 
Generally they have been able 
to absorb currency losses in- 
curred through the sharp appre- 
ciation of the New Taiwan Dol- 
lar, and they are in much better 
shape financially than their 
counterparts in, say, Korea. Lo- 
cal business is not by and large 
overgeared. Most lending is firm- 
ly secured and the banks’ main 
problem at the moment is find- 
ing enough customers to lend 
money to. Mr Chien says less 
than half his balance sheet actu- 
ally takes the form of advances 
All this serves to heighten. 


pressure for reform , even though 1 
most admit that the process it- 
self will not be easy. Qualified 
personnel, particularly in foreign 
exchange and treasury 
operations, are in short supply. 
The government Itself is pro- 
ceeding cautiously for fear that 
reform will backfire 

Many foreign banks have until 
now been able to make a lucra- 
tive living out of trade finance, 
though not all have been happy 
with their experience in Taiwan 
and some, such as Chemical and 
Bank of America have wound 
down their operations. As reform 
proceeds they will all have to try 
to make money in a new-style 
market place 

Local banks, says Mr Vaughn, 
“are coming out of a protected 


bureaucratic turf into the real 
world.” In many cases the au- 
thorities have traditionally im- 
posed a straightjacket on them, 
strictly defining their permitted 
sphere of activity. Few nave for- 
eign operations from which they 
can acquire the experience to op- 
erate in a liberalised marketplace 
The government has sought to 
limit foreign operations of local; 
banks, says Dr Liang of Chang 
Hwa Commercial Bank. They 
say that we do not have the ex- 
pertise ao the government wfll' 
not issue a licence for us, but 
this is a vicious circle.* With, 
luck, as reform proceeds, it is a' 
vicious circle that will finally be 
broken. 

Peter Montagnon 


TAIWAN lacks the 
stereotypical, flamboytaf, 
high-powered industrialist, 

perhaps . because flamboyance 
Is not in keeping with the 
Q rofiiHan p recept s of 
modesty and sett-deprecation. 

Bat behind the scenes leading 
Taiwan haatniranam reshape 

and re-define industries with 
their dedshms. Many also . 
participate in setting or 
modifying policies at 
government level, became 
business is Taiwan's 
life-blood. 


Tycoon 

with 

caution 


WANG Yamg-CMiig comes the 
closest to a Taiwanese version of 
a tycoon. He is also Taiwan’s on- 
ly self-made billionaire. 

Mr Wang, now 70, rose from 
humble beginnings as a small 
rice-dealer with little formal edu- 
cation to become one of the 
world's wealthiest men, with a 
fortune variously estimated at 
USSlbn-$2 bn. 

Despite enormous . success, 
built mainly on sales of PVC 
products, he remains the arche- 
typical Taiwanese. He shuns 
publicity - seldom appearing at 
public functions - and is reticent 
when questioned about his 
wealth. But he retains a firm 
hand on all top management de- 
cisions few his group of compa- 
nies, when a western model 
would call for diversified controL 

Mr Wang also retains a work 
ethic and sense of frugality in 
keeping with the Taiwan of SO 
years ago,, when he farced him- 
self to use earlier and work later 
than his better-connected com- 
petitors, and. thus expanded his 
business at thezr expense. 

Taiwan’s strength is still the 
dedication .and diligence of its 


workers, acconfing'to Mr Wang; 
.and he plans to cany these qnal- 
.ittes Into continued expansion of 
Formosa Plastics' facilities at a 
.time when other PVC makers 
I around the world are . having 
•trouble turning a profit. 

In the works is a USSlbn 

cracker an| l refete^T^pkmt. The 
cracker output will give the 
group its own supply- of ethyl- 
ene, a key ingredient of PVC. ■ 

1 Currently, the company relies 
on government-owned crackers 
for ha supply- When the prefect 
'comes on stream, Formosa Mas- 
tics' output of . PVC powder will 
rise from 600 tonnes a day to 
2,000 tonnes, and the company 
will control its production al- 
most completely from the 'top 
down. 

With such ambitious projects - 
and with US$380m in pre-tax 
profits last year - one would tend 
to think or Mr Wang aa an ag- 
gressive entrepreneur. In fact the 
opposite is true: he remains high- 
ly conservative in business and 
unwilling to consider diversifica- 
tion Into areas that are not fa- 
miliar, such as high technology. 

'If after some time people Be- 
come less diligent and the com- 
pany's competitive edge dimin- 
ishes, then maybe Formosa 
Plastics will have to move in a 
di ff ere n t direction,’ he says. 

But he makes it dear that such 
a move would be forced by 
events rather than undertaken 
as a risk venture, and that the 
company should stick to what it 
knowsbest: PVC and related 
products. 


In step 

with 

fashion 

TALK about carrying coals to 
Newcastle-. While Taiwan was 
busily becoming the world’s lar- 


gest exporter of footwear, John 
and Sofia Han, of Taishoe Inter- 
national, were developing Tai- 
wan’s largest chain of boutiques, 
selling foreign-made shoes. 

But to Mr Hau, aged 45, such a 
direction seems natural enough, 
given an interest in quality foot- 
wear that dates back to an to- 
fausinen he operated in 


And he certainly has no com- 
plaints from a strict business 
point of view: the husband-and- 
wife team estimate that their' 
string of “Sofia” boutiques 
around the Island are now gross- 
ing NT* 10m (about US$380;000) 
a month. 

Mr 'Hau made a point of team- 
ing every aspect of the shoe bom- ' 
ness before beginning his cur- 
rent venture, ffis experience in 
the US taught him the Impor- 
tance of quality and scheduling. 

Back in Taiwan in 1973, he got 
a chance to put his theoretical 
knowledge to the test when he 
started up a factory employing 
retired servicemen to make shoes 
for export. - 

He specialised In high-end, ex- 
otic footwear made of unusual, 
leathers such as snakeskin; and 
by the time he sold his factory 
five years later, he was con- 
vinced that Taiwan’s future In 
footwear lay in quality rather 
than volume. 

In 1978, Taiwan’s footwear In- 
dustry was beginning the expan- 
sion that would make it the 
world's leading supplier in terms 
of volume. But Mr Han began 
trekking to advanced shoemak- 
ing nations such as Italy to learn 
first-hand about quality shoes 
and sophisticated machinery for 
making them. 

He put that knowledge to good 
use .with a new manufacturing 
venture that nowadays turns out 
6,000 pairs of shoes a day. But he 
felt there was also a market in 
Taiwan for prestigious labels 
from fkmous European and 
American designaa, and in late 
1985 was able to conclude an im- 
porting deals with Bruno Magti 
of Italy. 

Nowadays, the Sofia Boutiques 
offer ladies’ shoes carrying such 
labels as Andrea Pfister, Moni- 
que, Gasakei, Colette, Mario Bo- 


loans, and Polliru of Italy, as 
wSl as Bruno MaglL They have 
tried to add US shoes to 
their Hite, and recently added a 
shop in the northern Ts^ei sub- 
urb of Ttenmu that carries shoes 
for the whole family. 

The Haus’ success h« 
pfripiwwd as much from Taiwan s 
new-found affluence as from the 
'couple’s astute sense of quality 
aim business acumen. • ■ 

Nowadays, fashion-conscious 
Taiwanese housewivta to not 
blink at spending NTSS.OOO 
(about USSlOO) or more «i a 
pair of shoes from a Sofia Bou- 
tique. And for those who are still 
hesitating, the Hans have lntxo- 
■ duced a medium-priced range of 
Italian imports that they have 
designed and made for the Tai- 
wan market at contracted facto- 
ries in Italy. 


A father 
of the 
micro 


MATTHEW Mian hardly acts 
like a man who helped design 
the world's first microprocessor. 

Quiet and unassuming bfr na- 
ture, he becomes positively reti- 
cent around the press. But get 
him started on his favourite top- 
ic - how high tech applies just 
about everywhere - and it is 
hard to get nim to Mop talking. 

- Mr Mrau heads a group of affil- 
iated companies that au involve 
high tech m one way or another: 
Union Petrochemical, lien Hwa 
Industrial Gases, and Mitac Inc, 
to name but a few. 

In addition, he oversees sevraal 
joint ventures - again, in the 
nigh tech field - with such 
names as British Oxygen of the 
UK, and Citibank N A, Digital 
Equipment Corp, and Intel Carp 
of the US. 


Hte projects run . from manu- 
facturing high-pressure vessels 
for cyrogente research » produc- 
ing special Industrial gases, and 
to modifying Digital Equipment 
mainframe computers for, the 
Taiwan market. 

Mr Mian, who- at 41 holds a 
degree in electrical engineering 
as well as an MBA from the Uni- 
versity of California, was One of 
five people on aa Intel Corp de- 
sign tram that designed the first 
eight-bit microprocessor, the 
8080, and sparked the so-called 
‘microprocessor revolution" that 
has made possible everything 
from personal computers to 
talking" copy mac h in e s. 

He left Inted in 1973 to return 
to Taiwan, and promptly de- 
signed the world's first computer 
that used Chinese. Since then, it 
has been development after de- 
' velopment, most often involving 
Joint ventures with foreign part- 
ners. 

'The mentality of Taiwan 
should move toward more global 
•thinking through many, many 
joint ventures. These are the 
things that tie us together," he 
says. “Shareholders [in these 
. projects} then become truly mul- 
- tmatSonals, rather than simply 
opening offices overseas.” 

That concept has worked weO 
for Mr Mian. He recounts, for 
instance,' how Digital Equipment 
originally balkea at the idea of 
setting up In Taiwan. 

1 made a market for them, 
and then said, let's talk - ,* he ex- 
plains. The resulting co-opera- 
tion produced a version of Digi- 
tal's VAX computer that was 
tailored for Taiwan’s specific 
needs and that- has made Digital 
. the number-one vendor of large 
computers in Taiwan! 

In* late October Mr Mlau also 
introduced the. fust Cray super- 
computer into Taiwan - an event 
'which he says will bring up the 
.country's technology level tre- 


'This drives me, to see this 
kind of thing happen,* he says. 

The US$5J5m second-hand ma- 
chine will be installed at Nation- 
al Taiwan University, where 
among other -tasks it will process 
data provided by the Taiwan 
weather bureau. 


dUrtfara (Inter na tional) 

AIR Nauru, Cargo Lux, Cathay 
Pacific, China Airlines, Flying 
Tiger Line, Japan Asia Airways, 
KLM, Korean Air, Malaysian 
Airlines System, Martinair 
Taiwan, Northwest Orient, 
Philippine Airiines, Singapore 
Airlines, South African Airways, 
Thai International. United 
Airlines. 

Akttn— (donmrtto) 

CHINA Airlines, Far 
EastemAlr Transport, Taiwan 
Airlines. 

to to math wl airports 

TAIPEI, Kaohaiting. 

Currency 

NEW Taiwan $. Currently 
about NT$30 to US$1. Notes: 

NTS 1,000, $600, $100, $50. Coins: 
NT$10, $5, $1, 50 cents 

Immlgratloa 

AIL visitors require visas. 
They can be obtained, usually 
within a few days, at any 
Taiwan consulate or - in the case 
of countries with which Taiwan 
has no - at unofficial 

presences such as Taiwan trade 
offices. Types of visas include: 
transit (two weeks stay), tourist 
A (up to three months), tourist 
B (up to six months), 
commercial (also up to six 
months). The Government also 
issues group tourist permits, 
valid for two weeks, to groups 
of at least 16 people. 


If you're going to Taiwan 



Evening fort navfeet to Tetpel 


Customs 

PERSONAL effects are duty 
free, but travelers must declare 
radios, TV sets and 
tape-recorders. Travellers' 
cheques and bank drafts need 
not be declared. No more than 


TRAVELLERS from, car passing 
through, cholera-infected areas 
and who have stayed there at 

inoculation certificates. 


the country, but there are no 
limits on the amount of foreign 
currency that may be brought 
in and. If declared on arrival, 
taken out 

Without a declaration farm, no 
more than US$1,000, or the 
equivalent, may be taken out 
Gold and silver bullion, grain, 
unauthorised copies of books 
and record s , genuine antiques, . 
ancient coins, and_ paintings stay 
not be taken oat Coho' than 
.these, many other items are 
dutiable; it is best to enquire 
of Taiwanese offices abroad. 
Credit cards are accepted in 
some places. 


Major hotels In Taipei 

AMBASSADOR, Atiaworid 
Plaza, Brother, Century Plaza, 
Fortuna, Grand, Hilton, Howard 
Plaza, Imperial, Lai Lai Sheraton, 
Rebar, Ritz, RayaL 
There are also less-sumptuous 

but quite comfortable four-star 

hotels, as well as a variety of 
lesser-known but liveable 
hostels. Those mentioned an 
provide transport to and from 
the airport. It is best to book 
in advance. Rates for 
international standard run from. 
US$71 to US$150 a day, plus . 
a 10 per cent service charge 

MgMfto 

DISCOS, pubs, piano bars, 
“hostess' dubs m a wide variety 
of conditions and price ranges. 
Safe fen' starters and far getting 
to know a cross-section of the 
. expat and local community: the 


“Ploughman” chain of pubs and 
restaurants. Otherwise, prices 
range from moderate to absurd. 

Car hire 

DAT; weekly, and monthly 
rates availahle from Hertz and 
a host of small operators. For 
flntltoe.yisUnn, it is best to. 
book a driver, becaus e of local 
driving habits and a general 
-absence of street signs In 
romanised farm. 

Ctty transport 

MOST visitors (and marry 
residents) travel by taxi They 
are relatively inexpensive but 
usually terrifying. Have a friend 

Chinese, as most drivers do not 
speak or read English. • 

Around tlM Wand 

CHINA Airlines and Far 
Eastern Air Transport provide 


Boeing 737 to major dries, 
the smaller Taiwan and Formosa 
Airlines. fly small prop planes 
to offshore islands. An excellent 
system of coaches running on 
the North-South Freeway links 
Taipei to the rest of the island. 

In addition, a modem rail system 
t akes travellers from Taipei to 
Kaohaiung in about four hours. 

Consmonlcatiofis 

THE telephone system la at 
worst reliable and at best . 
excellent. Satellite and undersea 
links, as well as international ■ 
direct dialing on most . 
exchanges, make 
communications simple. The 
phone company also offers 


packet-switched and dial-up 
computer communications, as 
well as fax connections, for 
offices with the necessary 
equipment. 

'Banking 

THIRTY -three foreign 
branches and several Chinese 
■ banks are equipped to handle 
international business and 
.personal transactions. 

Electricity 

110 volts AC, 60 cycles 

Tima 

EIGHT hours ahead of GMT 

- Office hours 

0900-1200,1330-1530 
(Mon-Fn). 0900-1200 (Sat). 

Climate 

SUBTROPICAL, with average 
temperatures from 12 degrees 
Centigrade (Jan-Feb) to 35 
degrees C (July-Aug). High 
humidity makes berth extremes ‘ 
unpleasant Taipei city's air is 
extremely polluted, especially 
in summer. 

Attire 

MOST government and 
business affairs are conducted 
in coat and tie, but there are 
exceptions. Businessmen often 
.dress casually when visiting 
factories. In the summer, when 
the heat makes attempts at 
formality absurd, government 
officials often resort to safari 
suits. In the colder months, it . 
is wise to pack sweaters and ' 
perhaps a medium-weight jacket 
Anything not intcludedin the. 
traveller s kit can, of course. be . 
bought in any number of shops 
here for a song. 

Bob King 


Kg? *-***# 

FIRST COMMERCIAL. BANK 


MEAD o m C Ei 

SO Chungking South Road, Sac. 1, 
Taipei, Taiwan, R.O.C. 

Telex: 1131001740 
Cable: “RRSTBANK" Taipei 
Tel: (02)311-1111 A (02)361^3811 


30 Chungking South Road. Sec. 1. 

Tel pel, Taiwan. RJ0.C. 

Telex: 24472 

Tel: (02)331-8658 . (029331-8659 

NAS 122 DOMESTIC BRANCHES M TAIWAN, ILOlC. 

OVERSEAS BRANCHES 
AND REPRESENTATIVE OFFIC& 

SMfiAPORE BRANCH: 

5 Shenton Way #01-02 
U1C Building. Singapore 0106 
Cable: "HRSTBANrC Singapore 
Telex: RS24693. RS24917 
Tel: 2215755, 2215381 

SIMM BRANCH: 

Comer of O’Brien Aw. & Rte 4 
Agana. Guam 96910, U.SA 
Cable: "FCBT* Guam 
Telex: 6325 
Tel: 4726864-5 

LONDON BRANCH: 

Ground Floor, 2 South Place 
London EC2M 2RB. United Ki ngdom 
Cable: “FIRSTBANK” London 022 
Telex: 897237 
Tel: (01)628-2612 

FRANKHHtT REPRESENTATIVE OFFICE: 

21st Floor. Frankfurter Bure Center 
Malnzar Landstr. 46 
6000 Frankfort main 1, W. Germany 
Telex: 4170028 
Tel: (069) 7240246-7 


Powell & Associates 


Taiwan liberalisation 
brings Opportunities & Challenges 
for New Business & Investment 

To potential investors we 
offer proven skills in - 

* Screening/Evaluation 

* Project - Strategy 

- Development 

- Implementation 

* Corporate Financial Advice 

* Cross-Cultural Negotiation 

Our experience will shorten your learning 
curve. Please write or calk RJB. Powell 

SUITE 1006, EVERSPRING BUILDING 
147, CHIEN KUO N.RDl, SEC 2, 

TAIPEI 10479, TAIWAN 

TOL-<S86HZ^S(tt-8238 
BAX:(886W2>-562-83S5 
TELEX: 10594 



A hotel royal taipd 

37-1. Sadlre 2, Chung Stan North Rad. Tripri, Taiwan. B.O.C. 
Tflfl (IB) 5*2-3266 Tatac 23915 Cate: HOWL HIL Fac (02) 5434897 


rfttohotBteiwnaoxtf 




m am jal/ui 

n« GRANU ItUATRHdl' Hums 



EATO 

A MATCHMAKER 
OF BUSINESS 
PARTNERSHIP FOR 
EUROPEAN FIRMS 

The Euro-Asa Trade Oqpa- 
hatka, a no-jrUkratfy, 
bs been pfyng ra active 

role for pranotfy co-gptrc- 

tioa te t wra the ROCfc 
tomes and wtestrU 

n — m'lw « ad 


WHAT WE DO: 

WAnktig Enfein liiainfiin.il 
a eqfafy b anm oppo umki p 
RM iodiHtnd QKpndon five 

*r“®* - 


fir hade 


ad urhulm wtii 



hbw^swtbade orgmbsathm 

^ T ^ T * i "* RO< 

Telex: 25794 EATO Fax: (02) 392 8393 




Financial Times Thursday November 12 19.87 


FINANCIAL SBMCES 
to £26,000 
+Car+Bfti 
CHy 


CHIEF ACCOUNTANT 
c£2&0Q0 + Car 
C. tendon 


FINANCIAL 
MANAGER 
c£25jKI0+Bte 
Berkshire ■ 


SENIOR ANALYST 
£24000 + Bobo* 
West End 


SENIOR 

ACCOUNTANT 

c£23,000+Car 

Swrey 


ASSISTANT 

CONTROLLER 

c£22JHI0+Bft* 

Lflodn 


The ideal first rime move for ACA’s with some 
relevant sector audit experience. Our diem, 
one of the major forces-within the square 
mite, has a much envied record of progress- 
ing ambitious accountants into corporate 
finance, business development, acquisitions 
and mergers and investment management 
Ref;RIC237 


This prominent madia and communications 
organisation wishes to strengthen its finance 
function by the appointment of a quaflfisd 
accountant aged 2&-3Q- Candidates should 
be able to demonstrate proven commercial, 
management and technical skills together 
with the ability to thrive in-a fast moving and 
dynamic environment ' Ref: MJH.806 


This market leading FMCG company urgently 
requires a motivated accountant with de- 
veloped business 'acumen. You will take 
responsibility for management and financial 
accounting procedures as we! as promoting 
brands and prafitabBity. Evidanca of applied 
skills and dedication m this broad role win 
lead to early success. R eh AN.184 


Renowned retailing organisation, seeks an 
energetic young qualified accountant with 
experience of corporate planning. This influ- 
ential and varied position reports directly to 
the divisional board and Involves the presen- 
tation of financial and strategic information. 
Outstanding promotion prospects for self- 
starter. ■ RefcJPB.29 


Blue-chip manufacturing company offers 
outstanding career 'movie to qualified 
accountant aged. 28-38. Thb role encom- 
passes financial reporting, budgets, forecasts 
and system enhancement Several years 
relevant experience in a computerised, multi- 
national environment are essential for this 
challenging position. ■ . . RehAC.637 


Prestigious international bank has an exciting 
opportunity for a young recently qualified 
accountant eager to make a career In finan- 
cial services. Responsibilities Include toward 
planning, systems development - and 
statutory accounts. Continued expansion Will 
ensure excellent prospects for the successful 
applicant . • Ref:AC£6l 


THE COMPLETE FINANCIAL SELECTION SERVICE 

Vernon House. SJcAon Avenue, London WC1 A 2QH.Tel.-01 -8312323 




INTERNATIONAL APPOINTMENTS 


Kidder Peabody names 
senior vice-president 


MR Clarence E. “Red* Johnson, 
former chief executive officer 
and director of Borg- Warner, has 
been named senior vice-presi- 
dent of Kidder, Peabody, the 
Wail Street investment house. 

Located in the company's Chi- 
cago office; Mr Johnson, 61, will 
assist in all areas of the business 
by servicing existing clients as* 
well as developing new ones in 
the Chicago area and the firm’s 
Central Region. In addition to 
working with Kidder's existing 
staff In these two areas, he will 
be involved with the company's 


specialists located in New York 
and around the country, encom- 
passing s wide range of activi- 
ties. He will report to Mr Max C. 
Chapman, Jr., president of Kid- 
der, Peabody. 

Mr Chapman said: “We expect 
that Red's extensive manage- 
ment experience and knowledge 
of the Midwest will contribute 
enormously to our efforts in this 
important region.” 

In a career with Borg- Warner 
that began in 1953, Mr. Johnson 
served in several operating and 
staff positions encompassing 
administration, international 


relations, manufacturing and 
other functions. 

Prior to _ 
he was director 
Millikin Univerait 
Illinois. He Joint 
Bureau 


■Warner, 
at 

in Decatur, 

the Federal 

of * Investigation in 
Illinois, and served 
as a special agent from 1962 to 
1963. 

Kklder, Peabody is a full ser- 
vice, global Investment banking 
concern with more than 7,000 
employees worldwide. In 1986, 
General Electric acquired an 80 
per cent interest in the 122 -year- 
old company. 



Communications 
executive at 
American Express 


Mr Dale E. Boyer 


A leading geneticist joins 
SmithKline Beckman 


Hughes 

Tool 


DR Leon E. Rosenberg, Dean of 
the Yale University {School of 
Medicine and one of the nation's 
leading geneticists, has been 
appointed to the board of direc- 
tors of SmithKline Beckman. 

A specialist in genetics 

and inherited metabolic disor- 
ders, Dr Rosenberg, 54, has 
taught at Yale since 1965. Before 
his appointment as Dean of the 
School of Medicine in 1984, he 
helped to establish and served as 
chairman of the Department of 
Human Genetics from 1972 to 
1984. He was named &NJL Long 


Professor of Human Genetics in 
1980. He was an intern and resi- 
dent in internal medicine at the 
Col um bia- Pres byterian Medical 
Centre, and worked at the 
National Cancer Institute serving 
as a clinical associate and senior 
with the institute's 
Bervice. 

★ ★★ 

DR IRWIN Stelzer, director of 
Harvard University's Energy and 
Environmental Policy Center, 
has announced the appointment 
of Mr Gerald Malone, MA, LUB., 
as the Center's new Director, 
European Affairs. 


A Member of Parliament in the 
UK from 1983 to 1987. Mr 
Malone has been active in.devel- . 
oping UK energy policy, particu- 
larly as it relates to Neath Sea oD 
development. 

In announcing the appoint- 
ment, Dr Stelzer commented: ‘It 
has become increasingly clear 
that energy and environmental 
issues are transnational - the 
solutions to problems ranging 
from acid rain to the optimal 
structure of electricity supply 
industries increasingly require 
an understanding of the works 
of scholars in several countries.” 


THE appointment of Hr 
Dale E- Boyer as president 
of the Hughes Tool Com- 
pany, Houston, Texas, has 
been announced by Hr 
Howard I. Bull, senior 
vice-president of Baker 
Hughes Incorporated and 
president of Baker Hughes 
Drilling Equipment. 

Hr. Boyer is a 1950 gradu- 
ate of Vanderbilt Univer- 
sity, and since 1960 
held various executive posi- 
tions with Smith Interna- 
tional. ' 

Hughes Tool Company, 
which- merged with. Baker 
International earlier this 
year, is the leading supplier 
of rock bits to the o& and 
gas drilling industry. 
Through his recent posi- 
tions, Hr. Boyer brings a 
strong background and 
knowledge of the rock bit 
market to Hughes. 


THE DIVERSIFIED financial and 
travel services company Ameri- 
can Express has announced the 
appointment of Mr Lawrence A. 
Armour as senior vice-president, 
corporate communications. 

Mr Armour, 52, will oversee 
day-to-day media relations both 
in the US and abroad; and be 
responsible for the design, devel- 
opment and implementation of 
strategies far communicating 
information about American 
Express and its activities to its 
external audiences. Additionally, 
he will counsel the chairman, 
president and other members of 
senior management bn matters 
relating to the media and public 
affairs. 

Since 1981, Mr Armour has 
held the position of director of 
corporate relations at Dow Jones, 
where he has been responsible 
for public relations, investor 
relations, and stockholder rela- 


tions. Prior to assuming that 
post, he spent 20 years at Bar- 
ron's as a reporter, editor and 
news editor. 

★ * ★ 

MR THOMAS J. Becker has 
joined Chemical Bank as manag- 
ing director in the capital mar- 
kets services and balance sheet 


securitisation effort and will 
report to Mr Sabatacakis. Mr 
Becker was previously with Kid- 
der, Peabody, where he held the 
positions of managing director, 
asset finance department, and 
president of Kidder, Peabody 
Acceptance Corporation I, an 
issu er of securitised transactions. 
In 1982, Mr Becker received the 
firm's ‘Man of the Year* award 
in recognition of his leadership 
capabilities and financial inno- 
vations. 


Bowater elects director 


MR Hugh D. Aycock, president 
and chief operating officer of 
Nucor Corporation, Charlotte, 
North Carolina, has been elected 
by Bowater to its board of 
directors. 

He will serve in the claim of 
directors whose term expires at 
Bowater’s 1989 annual meeting 
of shareholders, and succeeds Mr 
John A.B. Keeling, who has 


resigned upon reaching the age 
of 65. Mr Aycock has been in the 
specialty steel manufacturing 
and fabricating business 
throughout his professional 
career. Mr Keeling has completed 
nearly 40 years of personal 
association with Bowater In 
North America and some 60 
years of family service to the 
company and its predecessors. 


Accountancy Appointments 


Financial controller 



c£25 s 000 plus car: 
London 


Leadership in the field of corporate information software is trrfonnaflon Bunders^ 
"raison effltre". Its products and principally Its 4GL FOCUS software are widely 
used by an impressive list of blue chip companies. The mqjor su b sidiary of fts US 
parent, the UK company has achieved a 50% Increase intumwerto £10 mllion over 

the last yeac Furfiier growth prospects tv way of market expansion, within the UK 
and via fts European subsidiaries, and also by way of its highly active product 
development and acquisition programmes are excellent 
The rale of growth now justifiesthe adcBflon of'a Controller for theUK companies 
thus leaving the Group ControUerto develop European activltiea. Leafing a train of' 
eleven, file person win be required to give financial advice to the five Business Unit 
Managers and be tutty responsible for accounting, management reporting, planning 
and treasury activities plus administration of the IflC operations. . 

To join this high palfiXB team, the person shopkl be a graduate trained accountant 

with at least three years? post quafificatlon experience, preferably gained In a service 

company environment The right person must be assertive, self iteiant, and pro-adNe. 

A high order of cocmnuracaBon sklls, commercial acumen and computer awareness 
are also essential Preferred age 1827-35 years. 

Prospects for expanding the rote to encompass the European subsidiaries are 
excellent 

Rtaumta, inducting a daytime telephone number and current salary to 
Chris Haworth, Ref.CH814. 


Coopers # 
&Lybrand 
Executive 
Selection 


Coopers ALytxand 
Executive Selection LimBed 

Shelley House 3 Noble Street 
London EC2V7DQ 
01-6061975 


ACCOUNTANT 

CONTROLLER 

£18,500-21,500 package Group 
of N. London Co's Manage- 
ment Sl Consolidated 
Accounts. Not necessarily 
Qualified. Sound character & 
ability to advise on all fimnriii 
affairs. Age 25-35. 


COMPLIANCE 

ACCOUNTANT 

£20,000 neg. A prominent city 
institution urgently requires a 
motivated qualified accountant 
(preferably with exposure to fa- 
tares). Excellent opportunity 
for a rewarding and interesting 
career outride the pro fe ssion. 


AUDIT MANTt 
£24-28.000 + package* OPEN 
ON AGE - Fast growing. Dan- 
don, medium uA’i who are 
building for the future. Audita 
£10-60m T/O include PLCs. 
Every prospect for partnership. 


INTERNAL 

AUDITOR 

G£17,00(H- Very generous ben- 
efits. London based 
multinational group with di- 
verse interests. 30/ 
travd-Europe only. Age 25-35. 
Qual ifi c at ions, systems & audit 
experience desired. 

MERIDIAN 
ACCOUNTANCY 
KEC CONS. 

25 MUSEUM ST.WdA UT 
01-255 1555 



Financial Controller 


to £35,000 + car 

Ourcfientis a medium sized, brpacJy based 
co mm e nial finn of sofiritore which in recent yams has 
enjoyed impressive growth. The firm is modem in 
outlook and has an axcelent reputation for its 
professional services to a varied UKand overseas 
efientbase. Its m^or departments indiKteaxnpany 
and commercial iaw.property and conveyancing, 
Hg a tion and private egents’ affairs. 

To support this phase of growth a Financial 
Oontrqfleris required. Reporting cBrectiy to the 
Managing Partner, the appointee wfflestabfish dose 
working relationships wMh the Partnereforthe better 
financial management and control of the business. 
-\flfitti staff respcinsfoffty, key tasks wtil include the 
review and development of EDP and IftanciaJ control 
systems, the proyiskxi of accurate financial 
sta te men ts and reports, the preparation of budgets. 


London 


A 

Arthur Young 


forecasts and plans, cash management and ad hoc 
financial projects. 

Candidates should Ideally be qualfied 
Accountants, aged In their thirties, currently working in 
a sofcttors' practice, an accounting firm or ssnter 
professional environment Experience of solictors' 
accounts is useful but not essential. Above all we are 
looking for exceDent communication skills, a practical 
approach to problem solving and the flexibilily to 
respond qtacWy and efficiently to the varied demands 
of the role. 

Please reply in confidence, giving oondse career, 
personal and salary details to: 

Judith Rfchardaon, Ref EH 962, 

Arthur Young Corporate Resourcing, 

Cftadei House, 5*11 Fetter Lane, 

London EC4A1DH. 


AMEMBER OF ARTHUR YOUNG INTERNATIONAL 


Accountants 

FvBy pit ««» 2SI5S 10 bud bmkfon 
Sortinml control team. RESP. » 
board Sw compHnoe nidi Ian A on 
loiag devdopowu of Memo computer 
lyxUsm. WCl E22UK.DCC+ cat, mon, 
pens, BUPA. 

WoodHouaa Re£ Corn. 

•1-494 4646. 


Head of Finance 
& Administration 

c. £27,000 pa 
plus accommodation 

Newmarket 

Our client the Animal Health Trust, is the only 
charitable institution in the United Kingdom 
working full time on the diseases of animals, their 
diagnosis, cure and prevention.' 

The Trust, which was founded in 1942, supports 
rigorous scientific method with business-like 
administration. This will be enhanced by 
appointing a Head of Finance and Administration 
to ass st the Director co-ordinating all non- 
scientific matters. 

A qualified accountant is required whose 
professional knowledge includes computerised 
accounting for multiple cost centres, MIS, asset 
management and investment of funds. Experience 
of structured administration, preferably in a 
scientific environment or charitable trust is also 
called for. 

The salary and pension arrangements for this post 
are linked to University levels and superior rent- 
free accommodation is available. 

Applicants are asked to write,- quoting reference 
1503 and with a full cv, current earnings and a 
day-time telephone number, to 

BindcrHamlun mmmmsmmmm 

^ UAHIEEMENI COiStl LTAKTS. 
Twer Aisin, baafliw Sdaaion Kwna 


8 Sl Bn* Stoat London EC4A40A. 


Working os an International Auditor with Bf is 
not like working for any other company. 

You'll be working, for instance, in a depart- 
ment that covers the audit for the Bf Aquitaine 
Croup— France's third largest company— and 
enjoying the career prospects that this implies. 

Initially hosed in Paris, you’ll be spending 
around 50% of your time travelling to our locations 
all aver the world. Success-wiU lead you to a line 
position anywhere in the Bf Aquitaine Group. 



accountant 


need not be 

qui 

itewl 

iat 

— JL 

you 

dext 

>ect. 


Were looking for people of the highest calibre. 
Our salary and benefits package, including reloca- 
tion expenses, free accommodation ana a non- 
contributory pension scheme, reflects this. 

A graduate Chartered Accountant, preferably 
with a good working knowledge of French, you'll 
probably be aged around 25, newly qualified and 
ready for the challenge we're offering. 

- Your first step is quite simple: ring 
01-628 5021 and ask for Bob Gunning or send 
him your- C.V. at Austin Knight Selection, 
77 5f. Helen's Place, London EC3A 6 AS. 
Please quote ref: 120/JRG/87. 



COMPUTER SYSTEMS 
AUDIT MANAGER 

* Whenyou create a double-headed challenge, 
you need a single-minded professional” 

cJt22K + car + benefits * Swindon 

The merger of Nationwide and Anglia Building Societies, on 
September 1st, created an exdtlng new force in financial services. A S20 
binkm organisation with 900+ branches and some 8,500 staft 


It also brought 

environments 

networks. 


the resources of two separate mainframe 
at Swindon, ICL at Northampton) and two ATM 


The two win continue to rim side by side for the foreseeable future, 
thro creating a two-fold challenge for the new Manager of the Computer 


The brief for this key figure will fall broadly into two areas: firstly; on 
the development side, you’ll analyse new system proposals, assess the 
control requirements in respect of both ICL and UNISYS applications and 
ensure they’re implemented and adhered to. Secondly; you'll monitor 
easting systems for physical and access securitK network security; key 
management, contingencies and organisational controls. 

Hie development of Systems Audit techniques will involve not only 
the training of your own departmental staff but also influencing 
management into the acceptance of new ideas and methods. In this 
respect, excellent communication skills will be vital. 

This is a new role, and tor a committed professional with the right 
qualifications and experience it ought to be an irresistible challenge. We're 
looking for a qualified Accountant with a proven track record in systems 
audit - ideally in a large financial services environment or possibly from an 
Accountancy Practice. Either way; you'll need good managerial skills to 
control, motivate and develop a growing department. 

This is a high profile role offering the opportunity to make an 
indelible mart: on a blue-chip organisation. Outstanding career prospects 
are matched by an excellent rew a rds package with benefits including 

■ company cat; free BUPA and mortgage facilities (alter a qualifying period). 

Do you have a single-minded commitment to success? Then please 
write with a detailed CV (including your current salary), before November 
23rd, to: Richard Wharton, Personnel Administration Manager; 

Nationwide Anglia Building Soci ety; H ead Office, Chesterfield House, 
Bloomsbury Wqjl London WC1V 6FW. 

We are an equal opportunities employer. 



Nationwide 
Anglia ?amne 


i 






Financial Times Thursday November 12 198? 



£35,000 package + car Gloucesteshim 

fhis k «m «*rri tmg and important time tor our smaD accounts ttepartinent produces 
dients, a weU established aiid profitable effective management and financial 

maimfiwjiwinjy company employing about mfonnatkXL 

200 people. As a result of contmtxing Applicants, wlrowiD probably be gradnate 

success, the Board is currently negotiating Chartered Accountants, should be able to 

with its parent group for a carefully planned demonstrate these qualities and sfcQlsina 

management buy-out and future track record of increasing responsibility and 

independent business expansion. success. They should also, however have the 

In raderfo bring thefrsenkx executive team a mbiti on and c ommitmen t to ma intain their 

up to full strength they now wish to appoint a continued personal and business growth, 
young and dynamic Finance Director who There will be a hill executive ieamnention 

will play a major part in their shot and package for this demanding yet rewarding 

kmgertetm development mle. It win indude an attractive salary banus 

This key role will require somebody who has andequi^iaiticipatoaswdl asapnatige 

thepefsonaBty to work successfully with Qty ca^reiocatuHitothisvaypkumntiund 
advisers and investors; who has the drive and town and the otter usual benefits, 
acumen to participate positively in corporate Applicants should w rite, in c onfiden c e, 
planning and acquisition strategy; yet who enclosing a hill CV including salary details 

stiD has the “shirt-sleeves” approach and and quoting reference S2917, to Paid 

<ramd accojintine abilitv to ensure that a Carvosso. 


Thiskey rote wiU require somebody who has 

the personality to work successfully with Gty 
advisers and investors; who has the drive and 
acumen to participate positively in corporate 
planning and acquisition strategy; yet who 
stiQ has the “shirt-sleeves” approach and 
sound accounting ability to ensure that a 



Peat Marwick McLintock 


Executive Selection and Search 

9 Creed Lane, London EC4 V 5BR. 


Treasurer 


£Neg 


Reporting to die resident Vice-President, dm is essentially a development role. With liquid assets of nearly US$1 billion 
your main personal objective will be: 

* To develop the treasury management function for the Group, in line with their declared intention to more actively 
manage its investments. 

* To establish a high-level treasury expertise to increase the return on liquid assets, along with sec uri ty fo r f hn ds already 
invested. 

* To develop the Group's borrow in g expertise. 

Further responsibilities will include management of die Group's b or ro w in gs and cash, foreign exchange eapos ur es, cash 
repotting and bank relationships. 


Financial Controller 


£40KMin 

to the 


and will play an integral part in the Group’s devdopment- 

The candidate, ideally a qualified chartered accountant, will have experience of consolidation work and reporting systems 
within a majjor international company. Exposure to US acoounringptacrices would be useful, however; more importantly, 
the ewndjdatg will need to be dynamic, imaginative, be able to communicate at very senior levels and contribute to 
investment decisions. 

Both positions call for a young dynamic approach, probably aged in your early 30s you will be responsible for developing 
and building your departments. A knowledge of French would be useful, but not essential. Very attractive remuneration 
packages are offered along with excellent career prospects for the successful c a ndi d at e * . 

If you are interested in finding out more about these positions, please contact: Warwick Holland on 01-&31 0431 
(evenings 01-785 2747), or write, enclosing full CV to: Michael Page International, 39-41 Parker Street, London 
WC2B5UHL 


l_ 


Michael Rage International 

Recruitment Consultants 

London Amsterdam Brussels NewYork Pom Sydney 
A member of Addison Consultancy Group PLC 


GROUP FINANCIAL 
DIRECTOR 

West Midlands c £30,000+ Bonus + Car 

Our dtent is a highly prestigious, British-owned Group of Companies involved 
in m a te rials testing, servicing, design and industrial training, wm es tablishe d and 
with an international reputation for eaccflen c e, die Group is widely acknowledged 
as the elite in its field, setting the standards by which others are judged. 

As a senior decfokm- malring member of the Rnarrf, Hm» flmup F humriwl TX pqftq - 
win co-ordinate and define policy for the financial management of the 
Group’s affairs. 

Major emphasis will be placed on the development of Gronp strategies and 
policies in Sue with planned expansion by acquisition. Experience in thin area 
is esse ntial The role will cany a strong bias towards general manag ement. 

The successful candidate will be a Chartered Aecn nntnnt , aged afl-t. md 
edu ca ted to degree leveL Skilled in multi-branch «t r wm*ifiny rrmtml, computer 
applications and with at least three years Board level experience in Engineering, 
applicants will demonstrate maturity, leadership and commitment. 

Rjlished communication skills and the abilky to motivate and direct staff are 
prerequisite. The senior nature of the position also rf«TMiwfo watim * and yr rmtiTi ty 
coupled with a capacity for shrewdness and innovation. Overseas travel to sub- 
sidiaries will be required. Success in tins very demanding position will only cottte 
from candidates willing to demonstrate high levels ofcommitmoiL 
An eoce&ent remuneration package is offered together with the benefits normally 
associated with an executive appointment. Applications in writing with full 
career and salary history details and quoting reference B/089/87 should be 
directed to Steven French. 


Peat Marwick McLintock 

Executive Selection 

Feat House; 45 Church Street, Birmingham B3 2 DL. 


Construction Industry 

Assistant 
Finance Director 

£20-2 5k + car and attractive benefits 
EastMidlands 


Our is a progressive family-owned construction 
group, with subsidiaries to design and property 
de velopment The emphasis is on quality and design, and 
the Group has won many awards for its work over fl* last 
25 years. Thrower is currently £55 millkxi. and rapid 
growth is pbnoed for the next 5 years. 

The Assistant Finance Director will assume day to day 


will be an advantage, as will experience of dealing with the 
Qcy: A particular priority witt be wreview gristing 











tree will be nscftiL .. 

To appty.send foil personal and career details (indutfing 
earning*) to Caroline Dunk, quoting 
rcferetHxFT/191 and outlining ta your covering letter why 


in ttemedhzm-tenn fatme. 

A fl [| iii ^i i w nhmiiri tw» <puim«l Ch art ered Accu untantt 
preferably aged eariy to arid-thirties. Industry experience 


Management Consultancy Division 

Cloth ttaflCowl Mlnritry Street U®d*» VWwt Yorkshire LSI 2HT 


k A 

hi 


Group finance Manager 

c. £22,000 + car E. Midlands 


I Major International I 
’ Investment Company ' 

Luxembourg 

Our Client, a large international i n ve st ment company operating out ofLnxen dxmr g wi th assets around US$3.5 billion, is 
currently seeking (be following Joey personnel as part of in development plans for 1988. 


Ourcfient is a major engineering company 
operating at the forefront of industry - 
technology and with a turnover of c. £300 m. 
Witii a predominant position in teprtrw market, 
tire company is now embarking on an ambitious 
programme Co diversify its product base. TTiere 
has been a heavy investment in new technology 
and management and workforce are united in 
their convrutment to a busineasboth market led 
and responsive to change. 

In recognition of the need to reflect the 
market, the company has redefined Hs 
operations into two main groups each Wttha 
number of tfiscrete businesses estabfished as 
autonomous profit centres. As deputyto the 
Financial Controller of one of the new groups, 
t^BaTtarKison^rotenivvtuchthe^ppoirttee ‘ 
will be fully responsible for providing and 
evaluating tt^ businesses' financial and - 
management Information to tight deadfines. 

In addition to the compilation of group budgets. 


forecasts and plans, the individual win have the 
scope to introduce and im plement new systems 
and procedures and participate in the 

fomwlalton of group strategy. 

Caneidates will be qualified aooountantsaged 
late 20 r s/earty 30's. MeaflyyouwiRhavegafoed 
several years' corporate accounting experience 
preferably within a manufacturing organisation 
engaged in acontract engineering environment 
Afarnffiartty with financial modelling would be 
advantageous. Personal qualities win include 
wefl developed interpersonal skills, a practical, 
analytical approach and the drive to make 
a positive contribution in a challenging 
environment 

. Rease apply in confidence, giving concise 
career, persona and salary detafls to: 

Brendan Keetan, Ref ER 967, 

Arthur Young C or porate Resourcing, 

Citadel House, 5-11 Fetter Lane, 

London EC4A1DH 


Arthur Young 


AMEMB0* OFAtfTHUR YOUNG INIERMfflONAL 


i ■ ■ ■> 


■ M m ■ ' ft'-': 


J 


Computer Services MarketLeader 
West Midlands to £35,000 + car Sd benefits 


This £20m business is a market leader in the PC computer 
services industry. With over 10 years success in tins sector its 
flexible and entrepreneurial leadership plans continued .. 
explosive growth in the next 5 years. 

As Finance Director you will contribute significantly to the 
group's strategic development. You will SHpport its froa+eml- 
activities by managing effective responsive MIS, financial and 
accounting functions; provide and interpret data for the 
operating units and review and enhance systems and 
procedures fa response io changing needs. 

Yon will be a qualified accountant, aged 30-40, with axecord 
of outstanding performance in finance and accountancy in a. . 
substantial sales or service butiness. .Key traits will be a 
Commercial approach, ambition and commitment Prior 


experience in a related i n dustry is not necessary. 

A competitive remuneration package is offered, including 

performance-related rewards. Relocation assistance will be 
offered, if sgpropriate. 

Please reply to Patridcfioland, in strict confidence, with details 
of Scatter tiulsalaiy^ progression, education and 


letter. Interviews will be conducted in Bi rmingham and London. 


Management Consultancy Division 

EdmtmdHouso, 12-22 Nowhafi Street, B*mtingluuTi,B 33 DX 


ACCOUNTANT 


Surrey 


(Controller Designate) 

£ negotiable + car 


Our diem, part of a $1,500 million International Electronics 
Corporation, requires a young qualified ACCOUNTANT capable of quick 
growth in stature. Initially responsible for 6 staff already using the 
company's own computer system but in the Spring will be required to 
supervise the introduction of new software package necessitating parallel 
running alongside existing system. 

Candidates must have the ability to understand the computer industry. 
As there is a strong sales environment within the company, applicants 
should have a flexible mind and enjoy working closely with the very 
successful sales team. Commeraal/business acumen is as important as 
financial expertise in handling monthly accounts, financial reports, credit 
control etc 

Salary is negotiable and will depend upon past experience and in- depth 
ability to lighten the work load of die Director of Corporate Finance. 
Benefits indude a company car,BUIA, pension plan etc, which.aH add up 
to make this an attractive and important appointment Applications . 
from both men and women should be made by writing or telephoning for 
a Rsrsonal Summary Form quoting reference 1616. 




Harry Guy Associates 

RECRUFTMENT ADVISERS 

West End House Hills Place London W1R 1AG 
Telephone: 01-439 3084 


Securities Accounting 
Department 

ci23,000 + car + mortgage allowance Herts 

This is an achin g career op port u n i ty for an experienced 
Accountant to join Canada Life - a truly international oronmatian 
da mning dteworidg of ffndn C r ., investment and personal inrtyanec- 
Candklsus wiB be tnoBssradally qualified, with knowledge and 
rxprr i rn w of investments fmriixfing fixed interest, equities and 
properties), accounting, taxation and unit trust 
Main r r sp cn a b fl h ica will invohre re cording and controlling all UK 
and 6r§*frinvesnnratt and unit tnma, safe gua r din g nwe mnan 
awmi cndprgpartngdatBong»vestmeats.AdditMnaS^yonytllbc 

wawBog wit Unkind funds, en surin g efficient uxveamusa , lnvi 
prabiong tirndy and accurate reports on tmit prices. We are 


curre ntly apg rac>g ana improving our secunuct management 
and accomning systems and, as job wflfbe acting as project kmder 
and a nwmha- of the stee rin g committee, a numw and tngi™] 
■ppwfldi and tint-daw commanicarion ridlh are essemisl 

With a tram erf' around 8, you win need the managerial abffiry god 
experience to lea d and m otivate ytwr staff and ensure the smooth 
nmnuag of tfedcpmi p^^ l 

Th e toronfa a re oaxHcnt. Wfe offer a competitive salary conipany 


and asBoance widi rriotation expenses where unroorieie. 


Pkaise Write with faM p rraonal mad car e er or 

Kkphoto for an sq^Beotfam foan, tne Card FHtchmd, 
u — n fe n e ria I Mir ft m i mm 

U& Hoot, HjghStiecti Fetters Bax^ Herts EN6 5BA. 7U; 
PotteM Bar 01707) 5U22. 


...-^"GariaclaLife. 

your friend for life 









Financial TimesThursdayNovemberi2 1987 


nr 




West Midlands 


c £40,000 + car + options 


For a progressive and highly regarded retailing organisation 'which is one of die UK market leaders in its specialist fiefcL 
Backed by a major public group, it has an exceptional record of growth. In the last two years annual sales have doubled to 
over £.1 50 million. The company plans further rapid expansion. 

Promotion within the group has led to this opening- There is a strong finance function, and on-line computer systems 
using advanced point of sale technology have recently been introduced successfully. You will manage this new phase of 
systems development and play a key role in die commercial direction of the business. Other areas of emphasis will be 
financial planning and forecasting, supplier invoice processing and control, and the monitoring of capital expenditure. 

Probably m your thirties or early forties, you will be a qualified accountant with good quality commercial and systems 
experience. A background in retailing would be an advantage and you will already be working at or near board leveL 
There are excellent prospects for career progressionvrithm the group and a first dass benefits package, including 
relocation. 

Please write in confidence to John Cameron, quoting reference CF847, at 84/86 Grays Inn Road, London WC1X8AE. 
(telephone 01-404 5971). 

CAMERON • SIMPSON 

Consultancy.* Search • Selection 


ser 


• tv.: 


I Second Thoughts About The City? I 


This unique opport uni ty w ould ideally suit a newly 
q ualified rJiatr tBTgrf arf mmtant, nohn has 
contemplated a career in the City, but is now having a 
change of heart in the light of recent developments. 
Our client is a well-known household name in the 
retail sector. Having recently undergone a major 
transformation its new management is now actively 
developing an aggressive presence within die sector. 
With a view to developing broad miilridisripline 
financial services experience, the rok is based 
within the head office treasury function, with initial 
responsibility to assist the group texrh&nager 
in gK tahliahing a nwp mm pliimm and lar . 

planning function. 





c* £20,000 + benefits 

The role will expand to cover treasury and other 
related fin a ncial service areas such as insurance, credit 
card and leasing activities. 

Having qualified with a major firm, a first dass 
technical and professional background is required. 
The successful candidate will demonstrate strong 
inter-personal skills enabling him/her to deal at all 
levels within a demanding commercial environment. 

For further information call Melanie Resting on 
01-831 2000 (evenings and weekends 01-341 4028) 
or write to her at the Taxation Division, Michael 
Page Partnership, 39-41 Parker Street, 
London WC2B5LH. 


Michael Page Partnership 

International Recruitment Consultants 
London Bristol Windsor St Albans Leatherhead Birmingham Nottingham Manchester Leeds Glasgow & 

A member of Addison Consultancy Group PLC 




)r 


MANAGEMENT ACCOUNTANT 

London & Metropolitan pic 


r.ii 

jvv.'* 


. car-'+^bdmis.' 


0* 

laskiffi* 


A highly regarded property group, London & Metropolitan pic has an impressive performance 
record The group -is forecasting forther growth - both organically and possibly through 
acquisition.- • •• 

Based in Richmond, the Management Accountant will join a small high profile financial team 
responsible for the development, interpretation and presentation of essential business information. 
With an emphasis upon the review and analysis of project profitability, he or' she will prepare 
budgets, plans and forecasts. Working closely with and Influencing commercial managers, the 
Accountant will be ideally placed for increased responsibility within this fast expanding and 
entrepreneurial environment; 

In their late 20s, applicants should be qualified accountants from commerce or the profession. 
Analytical ability and good interpersonal skills are necessary. 

Heve write, enclosing a career/salary history and daytime telephone number, 
to DawM Hogg fCA quoting 


i 
s 

i •. : 

5 LLON D MANAC.f Ml Vf V k< linn ( nrwill.inU Hi-h HolUun I ornlon V\ ( i\M,)\ u)4<r> 

-- 


7 

U 

5 

C 

< 

7 

< 




iSLSf 


Recently Qualified Accountants 



Package to &30K 


Based C. London 


success 
accountards to join them in 


the most exciting and 


Opportunities now exist for recently tjuallf 
challenging area of accountancy. 

Assisted by sophisticated real-time computer systems, you will assume responsibility for assessing the 
financial wnpUeatjnft A and viability of a hroad range of business issues and ventures, indudirgt:- 

□ Product launches □ Store development 

□ Acquisitions □ Business performance 

These high-profile positions ofler extensive exposure to foe hidiest levels of management and all aspects of 
the group's activities. As a result success in these roles will represen t the first step in a rapid career 
progressioopath. 



Tofearn more about toe. 


contact 


garte^h^^ El 8AN. 


. *? 


■ V.- 5 

1 



APPOINTMENTS ADVERTISING 

£43 per single cohnnn centimetre 

P r e miu m positions wffl be charged 
£52 per aotfe oohmai c e nt i met re 

for Jurther Jetaih ctdL 

01-248 8000 

Tessa Taylor Extn 3351 Paul MaiwguaExtn 4676 

Deudxe Venablesfxm 4177EKzd)cth Rowan Exta 3456 
. Patrick Wilfiang Enin 3694 . 


EXECUTIVE 


YOU EARN OVER £25,000 P.A. AND 
ARE SEEKING A NEW TOP 
EXECUTIVE APPOINTMENT 

ta 4 k mummy wfisancid Wd Ccmatghi's team rfpafiMfenb,)]! at whom 
bnc hud tx fak a cc at mnagng AgctorleweL cm hdp yon. 


ud dfenvaty, pmfcnUdy to die ra «f mwtt ttw d vttttdeL 
m fit m afbumwj «**» *dam 
If yea w c u n wtf bf went*. — k for ear hedw bgatSerrice. 
32, Swfle Rim, Loodoo WIX IA& T«L> 01-734 387*- 


Couikmm 


Administration 

Manager 


Reading 


To E& 9 , OOOt Car 
+ insurance Benefits 


Oijrai*sTteisowe»-est2a3B5hedinsiJT3ncEixrr^Dai^ 
that has In recent yeas emoyed sutetexioai growth 
rt-irm ryi H u t i-w n mcttan of non-Bfia insurance 
business in the UK and overseas. 

The pprfthn as part of the executive team 
reporting tothe Beneral Manager, the Rnance and 
AcknrtstreKiQn Manager wtu play a modal role n the 
development of company s trategy . Htefrcr ^pecffic 
le spo i blji ldesWiM cover i liar ageri ient and 
■=3^<n irmjnrrrf nOng ftjTCtfcns. treasuru actMOes 

end [jHto mlantlfliJreiljrafltfeiiBLtcia 
CandhtatBSs stxjufcl be tjuaifled accouncancs. 
IdeoiyvMtth experience In a general ins uranc e 
Go rrpj ny. Ah involvement In eompuUa fcaaLkci 
should be an elenrent of that experience proven 
managerial abffltg Is an essential attribute. 
Sotaruond Benefit* n addition to the salary level 
quoted. Che benefits are generous, including a futty- 
expensed car, mortgage si±»5fckj. me dica l 
Insurance, non-cut Hi ixtcnry penstn and b 
relocat i on afcmonce where appropriat e . 


quoting Ref; 3Zf FT to 


AHA Consultants 
4/5 DeMMden Court 



London WIM7RA 


Chief 

Accountant 

CHy of London 
£25,000 p.a. plus car 

Our client a small, well-established financial 
services group, is looking for a Chief Accountant 
to maintain a conventional range of company 
and client accounts at its City Head Office. 

The post calls for a qualified Accountant whose 
experience of investment and of banking is 
matched by mature judgement steadiness 
and reliability' The range of important internal 
and external contacts requires good personal 
presentation and confidence. 

Applicants are asked to apply in writing, quot- 
ing reference 1515 and giving details of current 
earnings and a daytime telephone contact, to:- 

BinderHamlyn 


MANAGEMENT CONSULTANTS 

Itafli Austin. EttCUM Selection Dhisna 
B«fer Hum^n Marageraere CowAancs 
8 Si Etoda Sum. London EC4A40A 


r The Baiik^Bermnda limited. n 

Accounting Opportunities 


Bermuda 


The Bank of Bermuda Limited is an international banking, trust and investment management organization 
with over $3.5 billion in assets and 1200 staff in 5 locations worldwide. Hie Internal Audit Department 
plays a key role in the Bank and provides an excellent opportunity to develop an in-depth knowledge of 
banking and investment activities. An interesting and innovative approach to auditing is followed 
involving analytical and systems-based audits and die use of die latest auditing techniques, such as 
CAATs arid risk analysis. 


Internal Audit Officer 


The Internal Audit Officer reports to the Head of Internal Audit and has responsibility for much of-tHe 
day-to-day management of the financial, operational, trust and EDF audit functions. A considerable 
amount of time will be devoted to the planning and review of assignments and die management and 
sugprvijjoa 

a*—. Pr -» 

The^uccessfol candrdate will be a Chartered Accountant with at least three years’" post qualification 

in. A .management, pqsitipn, at, p^eg ent^ yd should have considerable 
expefiepce of systems-baspa auditing. Experience of banking aria EDP auditirig £s'r' 


ie. r 


EDP Auditor 


The EDP Auditor, reporti n g to die Internal Audit Officer, will have operational responsibility for monitoring 
systems development projects, performing technical environmental audits and specific EDP application audits. 
He/she wiE be expected to contribute to the general development of the EDP audit function and to promote its 
integration with non-EDP aspects of auditing. 

The successful candidate will have a pogrammingbackground as well as accounting and bank auditing experience 

and AouHato be familiar widi systems dewdopmentmethoddogy. - 1 

The Bank of Bermuda offers a competitive tax-free salary and a comprehensive benefits package. 

If you are interested in finding' out more shout these positions, please contact: Warwick Holland on 
01-831 0431 (evening? 01-785 2747), or write, enclosing full CV to: Michael Page International, 
39-41 Parker Street, London WG2B 5LH. . 




Michael Page International 

Recruitment Consultants 

London Amsterdam Brussels New York Paris Sydney 
A member of Addison Consultancy Group PLC ■ 





— ▼— — — 

Divisional Accountant 

“Fast track opportunity for a young accountant” 

c.£25,000+Car Central London 


Our client is the leading independent computer 
services company In the U.K. The company 
operates In a broad range of markets and has 
i established a wide and prestigious customer 
base. Success is dearly illustrated by a 
phenomenal growth record -averaging 25% per 
year- and an impressive profit performance. 
FCifther organic growth is planned and this will be 
supplemented by strategic acquisitions which will 
complement and enhance existing operations. . 

Organised cfivisionally on a profit centre basis, 
units have substantial autonomy and highly 
. developed commercial awareness. Reporting to 
the Group Vandal ConMer, the appointee will 
take responsibility for the management 
accounting of two divisions preparing, presenting 
and interpreting Information to tight deadlines. 
Specific areas of concentration will be divisional 
forecasting and the review and development of. 


financial controls and procedures. 

Candidates will be qualified accountants 
probably aged 27-30 and with at least two years 
post qualification experience. Whilst a specific 
industry background Is not required, the 
appointee must have a strong commercial 
sense and a pro-active, shirt sleeves approach to 
the rote which will establish the individual as 
a business partner who can contribute to the 
further development of the company. This is a 
high profile role in which success will bring 
recognition and earfy opportunities to progress 
further either within the function cm- into line 
management 

Please apply in confidence, giving concise 
career, personal and salary details, to: 

Brendan Keelan, Ref ER 966, Arthur Young 
Corporate Resourcing, Citadel House, , ■ 

5-11 Fetter Lane, London EC4A IDfL : 


Arthur Young 


A MEMBER OF AHTWR YOUNG INTERNATONAL 




L, 


■C ‘ 


1 


J 








Financial Times Thursday November 12 1987 


GIVE MEAN OUTLINE OF A CAREER 
IN MANAGEMENT CONSUUANCY. 


CHIEF 

ACCOUNTANT 


.-.-if 
- 1* " ' 


Variety: the spice of business life! 

As a young, qualified accountant 
or economist you'll recognise that var- 
iety' is essentially the difference bet- 
ween enjoying your work and merely 
tolerating it 

Since you wouldn’t be 
reading this if your situa- | 

non was the former, let’s ^ J 
give you an insight into the I 

range of work you might 1 

expect in a major interna- 1 

tional consulting practice. 

For example, you 
might be part of a team — — 

advising on a privatisation, 
a merger review or an acquisition 
study. Or, you may be expressing a 
view on a major organisation study, a 
management information system, or 
the profitability of a bank, venture 
capital company or newspaper pub- 
lisher. On the other hand you may be 


developing a business strategy and 
corporate plan for a multinational, or 
earning out a new venture feasibility 
study involving novel use of computers. 

Whatever the project, a future 
in management consultancy requires 


So, die questions arc: would 
you welcome the opportunity to 
broaden your commercial or industrial 
shoulders? Would you risk facing con- 
stant change and challenge? Would 
you enjoy more direct responsibility 




vour dear, objective approach to prac- 
tical problem solving. It also demands 
a career record showing evidence of 
positive achievement in commerce, 
industry, or the public sector. And of 
course a commitment to consistently 
high work standards. 


and a greater stimulus for your 
developing intellect? 

The environment like yourself, is 
open and informal, dynamic, thrust- 
ing, and growing fast Show us a good 
first degree supported by an MBA or 
an appropriate professional qualifica- 


tion and you -could negotiate a. salary 
up to £40 .000 plus a car. There are 
also genuine possibilities of partner- 
ship in around three years. 

If you’ve liked our outline send 
us vour outline. As the company’s 
selection advisers we’ll 
■ a arrange a confidential dis- 
J J cussion- quickly. 

V / John I,. Thpmpson 
/ (Ref: 1213), 
f Thompson Associates Lui, 
I Compton House, 

N 20A Selsdon Road, 

... ■ 1 South Croydon, 

Surrey CR2 6PA. 


SW London cl £23,000+ car 

OUR CLIENT is a member of a leading UK industrial 
services anf i distribution group. 

THE ROLE is to head up the accounts, department 
Repotting to the Finance Director the Chief 
Accountant will be responsible for all accounting 
matters and for managing a department of about 40 
staff in a fully computerised accounting environment 




,S 


XHE REQUIREMENT is fora vigorous young 
qualified accountant who is striving to progress a 
career in a demanding commercial organisation. 
Total familiarity with computerised accounting 

systems is essentiaL 

THE REMUNERATION PACKAGE will indudea 
salary of about £23,000 plus a 2 litre car Ca r eer 
prospects within the Group are excellent. 


Please reply in complete confidence enclosing a 
CV and quoting reference no 168A to the 

Managing Director 


Tanstead Associates Ltd 


Executive Search & Selection 
West End House, 1 1 Hills Place, London W1R 1 AG 



THOMPSON ASSOCIATES LIMITED 

I IIMNn ■ - W t.HTH»MI «. 


arnertliwofrfwniweMiPjtJ/aBOaniJGroffp 


■ 



CH IEF INTERNAL 
AUDITOR 


London W.l. c.£25,000 

Our clients are a substantial and weU 
established London based company providing a 
service in the procurement of supplies and staff 
required by a number of ofl exploration and 
processing companies operating on-shore and 
off-shore. 




Move your 
fast track 
record up a gear 


They now seek to recruit an experienced 
chartered accountant to run and develop the 
internal audit function with responsibility to the 
Chief Executive. The main areas to be covered 
indude systems improvement, reviews of 
performance in accordance with agreed 


contract terms, the evaluation of the reliability 
and accuracy of accounting records ami die 
conduct of special investigations as and when 
required. 

Candidates should be chartered accountants 

with snhs t a nrial audit accou ntancy 

experience in die profession and in commerce, 
preferably in the oil industry They must be 
mature, experienced, independent and have 
complete integrity. 

Please write in confidence with full career 
details, quoting reference 2402, to John W. MBs. 


4 Blue Chip 
Environment 


+ Project Assignments 
4 Problem Solving 
4 High visibility role ' 
4 Age: Ideally late 20's 


eat Marwick McLintock 


4 Some Overseas 
Travel 


Surrey Package up to £35,000 

Our diem; a Blue Chip multinational, is sceltiqg a high calibre accountant 
to join an influential ream at their Corporate Headquarters. 

The work is purely project driven and will encompass such diverse areas 
as developing information systems and advising on the business implications of 
accounting policy, A challenging role in an international environment, it will take 
you upwards through foe Group if you can meet the demands with a creative 
and practical response. 

You should have a good degree and be either a “Big 8” trained ACAor have 
qualified as a CAGA gr QMA jn a prestigious organ^tion. You must be able to 
demonstrate commercial awareness, technical strength, computer literacy and 
the ability to present cogent ip formation to executive 
management. 

If you are bright, persuasive and practical with fog four to 
reach the top, send a detailed CV in strict confidence to ■SQQQs' 
Malcolm Edgell BSg F£A or Pfppa Cnrfo BA at Douglas 


Llambias Associates, 410 Strand, London WC2R 0NS. Ref 8146. 


FINANCIAL, ft MANAGEMENT 


RECRUITMENT CONSULTANTS 


Executive Search & Selection 

9 Creed Lane, London EC4V5BR. 


Douglas [(91] Llambias 


LONDON LIVERPOOL MANCHESTER 


ABERDEEN 'EDINBURGH' "GLASGOW 


DOUGLAS LLAMBIAS ASSOCIATES LIMITED. 410 STRAND, LONDON WC2R ONS 
■ ■—...—i i, TELEPHONE: 01-836 9501 . 


r Head of Finance— Europe I 

Hi*Technology ' 


Thames Valley 


c £35,000 + Car 


Our client is a highly successful international subsidiary 
of a large publicly quoted American company. 

The company specialises in sophisticated electronic 
engineering and has a turnover in excess of $10 million 
and a growth rate of 2 5% p.a. 

They are seeking to recruit a Head of Finance to be based 
at their European head q uarters in Berkshire. 
Responsibilities will include assisting the Managing 
Director in evaluating acquisitions, further developing 
management information systems and managing a. 
department of five staff in providing financial 
and management accounts. 


t OUU huuui 

I L 


The successful candidate will be a qualified 
accountant aged 28 to 35 and intelligent, assertive 
but diplomatic, to meet the challenge of a sales- driven 
environment. Knowledge of French and German and 
exposure to US accounting practices would be an 
advantage. 

Interested candidates should write, enclosing a 
comprehensive curriculum vitae and quoting 
ref; 466, to Philip Rice MA, ACMA, 

Executive Division, Michael Page Partnership, 
39-41 Parker Street, 

London WC2B5LH. 


Our client is a private distribution and service group 
- within the hi-tech information processing market, 
with an impressive growth record to date. Annual 
turnover now exceeds £20 million, and success is 
firmly based on commitment to a high quality of 
customer service provided by professional arid highly 
motivated employees. It is envisaged that the group’s 
continued expansion will result in a flotation within 
3 years. 


increase profitability and ensure his in a position to 
achieve its medium-term objectives. 

The successful candidate will be a qualified 
accountant aged 30-40 ideally from a sales and 
distribution background. Strong technical, inter- 
personal and managerial drills are sought, a n d 
experience of corporate funding would be a distinct 
advantage. Other characteristics shotild include 


j years. energy, commitment and a sense of humour. 

A Group Finance Director is sought to join the Board If you possess the qualities our dient seeks, please 


Michael Page Partnership 

International Recruitment Consultants 

London Bristol Windsor StAlbans Leatherhead Birmingham Nottingham Manchester Leeds Gkngow & Worldwide 
. A member of Addison Consuhamy Group PLC A 


reporting’ 

| 


with executive responsibility for the group’s finance 
and administrative functions. A primary task 
will be to improve the financial control and 
reporting throughout the group in order to 


write to Barry A. Ollier ACA, Executive Division 
enclosing a comprehensive CV to 
39*41 Parker Street, London WC2B 5LH 
quoting ndL 467. 


Michael Page Partnership 

International Recruitment Consultants 

London Bristol Windsor StAlbans Leatberiiead Birmingham Nottingham Manchester Leeds Glasgow & Worldwide 

A member of Addison Consultancy Grvup PLC 




alphameric 


MANAGEMENT ACCOUNTANT 

Hampshire Package c £19,000 + Excellent Benefits 


SENIOR ACCOUNTANT 

Abu Dhabi 

Salary PD.STG.30,000 Free of Tax + Substantial Benefits 


Internal Auditor 


International role Bedford based 


Alphameric Keyboards, pan of the highly successful and fast-moving Atphamoric 
Group. w9 shortly be opening a major new production facility in central H amp sh ire 
and are seeking a Wgricaftre quattted accountant to join the management teem. 
FDrfurthwdani^^i^o contact Repotting to the FD. the successful applicant win possess strong trttrparscrai skins 
smwt* and a proven record in a manufacturing environment. Responsibilities include the 

davetopment of comprahandve Management Information Systems to support the 
' requ ir ements tri sustained company yowth. 

RG21 1QH. 

W: 0256461 133 


A WgWy compettfw remuneration package is offered along with relocation expanses, 
where necessary, to the new appointee. 


TXB INTERNATIONAL 
LIMITED 


MANAGEMENT ACCOUNTANT 


Welwyn Garden City 

c £18.000 


For further dataifs, please contact 

Accountancy Personnel 
10 Station Fuad, 

Watford, 

Herts. 

WDl 1EG. 

Tel: 09232 28332. 


TNG dynamic subsidiary of an exparrtng puttie group has achtsved a prog r ess i ve 
record of growth and expansion through the supply and manufacture of componsnts to 
the aviation and aerospace industries. The continued development of fheir impressive 
efient base, which mchidas al the major UK and principal European market leaders, 
has led to the need tor a "top-notch" management accountant 
This exciting opportunty would sub a young, nswty quaMied accountant, preferably 
CIMA, with a background of experience gained wHhn a manufacturing environment. 
Reporting to the FtnanC&l Director, this & An exacting and active rale, demanding 
100% com m itment and aNflty to make decisions as part of the senior management 
team. Kay duties include, preparation of financial and management accounting 
information, extensive involvement hi Gosling, budgeting out forward planning in 
addition to development of the computerised systems. 

The ideal candidate wlS be offered unlimited scope for career progression and an 
excvtent benefit package. j 


A leading public sector Fi nan cial Institution requires one Senior Accountant for its F inan ce 
Department in Abo Dhabi. 

The Institution concerned is actively involved in worldwide securities and other Investment 
on a large scale. The org an i s ation uses sophisticated investment techniques and employs the 
latest data processing and communications technology. 

The candidates appointed will assist the existing m anag ement accounting in the 

Finance Department in the following projects:— 

L The development of manag ement information reporting systems. 

2. The development of performance analysis and other management reporting 
techniques and 

3. Preparation of annual budget and budgetary controL ’ 

Scope for personal initiative and creativity is high. Duties will involve extensive contact with 
Directors and Managers and the position offers first class experience. 

Candidates should be qualified Accountants aged between 28-35 with good academic record. 
Relevant professional experience gained either in a leading international audit firm or 
directly in an Investment Bank or other major institution is essentiaL Energy, creativity and 
tact are key personal requirements. 

The candidates will be required to live in Abu Dhabi on married or single status. The 
remuneration package offered includes a substantial salary, transport allowance, furnished 
accommodation inclusive of all service, 45 days leave per annum, annual return airfares to 
place of origin, free health care, assistance with education of dependent children and a 
substantial ter m inal gratuity. Salary and benefits are at present free of ajl taxation. 

Please send full career detail# to:— 

The Director, 18th Floor, 99 Bishopsgate, LONDON, EC2M 3XD. 

Interviews will take place in London and in' Abu Dhabi in November 1987 or December 1987, 


Our client is the European subskfiary of a 
$5 billion turnover high tedt organisation. Their 


. sty Us that has created an exciting commercial 


As a young qualified accountant wfth tumor more 
years post qualification experience, preferably in audit 
you areiwwiooidnsfor International experiengc. This . 
role, with the small European Audit team, is 
responsible for the operational anriDPa n/fiHng af . 
Company sites in Europe, the Middle East and Africa. 

As an Internal consultant, you will be expected to 
ptan and manage your audits, present your results and 


Substantia) travel will give you a unique breadth of 
experience. 

An attractive benefits package including 


Brooks on 01-989 8342 lines are open till 830pm or 
write enclosing your CV to: PSN ReoruHment Services, 


PSN 


London EU2PU. 


Search & Selection- 


ft 




n 1 


-*5— » 

Dn 


I Group Finance Director I 

London c £40,000 + Benefits 


Va?, 


-\RT Vrfc 


- 2 ". 

* 


• ' ’ Vw 
Jr*"'* 

. *- • ■*+.■ ft. 









"BSP 



Financial Times Thursday November .12 1 987 


V 


V 


' *- c.* * 



Excellent Opportunity — Blue Chip Financial Services 




South Coast c£25,000+Mortgage subsidy +Car+Benefits 


Our client, a household UK pic. is a major company indie total 
financial services sector: A new division has recently been created ' 
to consolidate and manage to various personal foatyfol service 
operations. 

As a result they have identified a requirement for dje new position 
of Manager, Management Accounting. Reporting to the Fi n a n cial 
Controller, you will be responsible for a small team of people in 
developing a management reporting system opaHeofmooitoring 
the performance of each of in products, sub dhoriortf, and its 
multiple outlets. 

Being a new division, a high level of creativity; 
flexfeility and rommimient will be essential robe 




successful in performing thia role. 

The a p p ro p iia te candidate will be aged 28-33 and a graduate 
accountant. pi e fcmh ly arid* experience of the financial iwjfw 
sector. You will be 2 self starter and a good team player, with a “shirt 
sleeves’* operating style. 

A competitive padage with fall financial services benefits is being 
offered to the right candidate. 

If you beKeve that you can rise to this challenging role please 
submit your CV to: Wayne Thomas, Executive Division, 
Kingsbury House, 6 Sheet Street, 

Windsor 514 1BG. 


MkhadPagePartnershq> 

- : Tncerpflriooal Recruitment Consultants 
London Bristol Windsor gtAlbans Leanhqhead JS mringh s n i Nottingham Mandiesier Leeds Glasgow & Worldwide 
A member (4 Addison Omsubancy Group PUZ 


_J 


f*;ir 

- r a. i i. 


Financial Opportunities 
with a market leader 

Russel Hobbs TOWER 


Russell Hobbs Tower Limited employs over 1000 people on 
two sires, manufacturing and marketing a wide range of high 
quality consumer durables for markets in the UK and abroad. 
The company has a turnover in excess of£50m and, part ofPolly 
Peck International pic, is undergoing a major re-organisation 
and investment programme. Two new positions have now been 
created^ both based at Womboume which is m a pleasant rural 
part of the West Midlands.. - 

Management Accountant 

Reporting to the Financial Director, you wfll be responsible 
for a team covering all aspects of contxoIHng costs* cash, profits, 
assets and capital expenditure. 

Probably aged 28 to 35,and a q ua l ifie d a uu o ap t &n t, you most 
be experienced at developing «nri implementing new 
computer-based systems for standard costing *nd 
budgetary controls ideally in a high volume manu- 
facturing environment 

The starting salary is hjghly.attiactive, a car is 


mi muse caj 

B\ 


provided and there are good prospects for promotion within 
the Group. Ref PBM/1820/DJD/FT 

Credit Control and 
Order Processing Manager 

Reporting to the Financial Director yon wfl] be responsible 
for a «nwll team and required to new computerised 

systems for the control of debtors and order processing 

Aged 28 to 40, you must have at least five years? experience 
and a good track record in a significant manufacturing 
organisation with a large customer base. Some experience of 
cxpott.docmpentation ts highly desirable. 

The salary is negotiable and will appeal to people 
earning between £lGy000 and £15/)00 per annum. 

Re£ FBM/U21/DJD/FT 

Please write or telephone for an application form, 
or send a detailed CV to DJL Dew hirst at the address 
beknv quoting the appropriate reference number: 


PA Personnel Ser vices 


Bu ea d neSatnk ■ Sfaw * Ptyc k t Hu ar ia • R ennxnt T ati o n &PmcmndComabBJtty 



| Hi-Fliers for Hi-Tech I 

* Central London *- — 


to £25,000 + Car 


Our client is a highly successful company at the forefront of the rapidly expanding hi-tech business communications 
market. With an es ta bli s he d customer base of major household names, turnover is doubling annually and it is planned to 
go for a fall listing on die UK Stock Exchange in the foreseeable future. 

The Finance Director is bufklinga team of forward-thinking professionals for the fixating challenge ahead. Opportunities 
now exist for several q ualifie d ac countants wanting commercial involvement and direct responsibility for major business 
decisions. 


Business Analysts 


Probably newly or recently qualified, this is an ooceBenc op p ortunity for young accountants do be totally immersed in the 
business. Responsibilities will be varied, including financial planning, perfo r mance evaluation, business strategy, 
investment appraisal, development of reporting systems etc. You wiH be very much pro-active, innovative, commercially 
aware and willing to learn all aspects of the business. A confident and articulate communicatior, with high standards of 
both written and oral prese nt a tion . You will have the ability and resolve to assume more senior roles. Career development 
opportunities include both financial and genera! management. 


Financial Controller 


A commercial accountant with energy and drive to play a key role in the d««k>pmenr of this dynamic business. With 2-3 
years’ post-qualification experience in the service sector, you are ready to assume responsibility for the control of this 
rapidly expanding business -"growth with control 0 is die way forward. You wiH be responsible for initiating close working 
relationships with die management team and will have active involvement in the day to day operations. Strong and 
persuasive communication skills, drive and determination are prerequisites. 

Credit Control Manager 

Accustomed to working in a tough commercial environment, you will be responsible for die continued development of the 
entire credit control operations. Previous experience in tins field is essential, as is the ability to communicate effectiv e ly at 

all levels throughout the company. 

All positions call for qualified Accountants of graduate calibre- The ability to communicate financial concepts to 
operational managers and to work closely with senior executives are important qualities. Above all, you must be highly 
motivated , » self- starter, ianbitMus and an achiever in both corporate and personal objectives. 

Very much a meritocracy, excellent prospects exist for capable young executives to gain rapid promotion to positions of 
challenging responsibility. 

Interested applicants should write, enclosing full curriculum vitae to Liz Salter at: 39-41 Parker Street, London WC2B 
5LH or ring her on 01-831 2000. 


I • 



Michael Page Partnership 

International Recruitment Consultants 
London Bristol Windsor St Albans Leatheriwad B irmi n g h am Nottingham Manchester Leeds Glasgow & Worldwide 
A member of Addison Consultancy Group PLC 


I 


APPOINTMENTS 

ADVERTISING 

£43 per single column 
centimetre. Premium 
positions £52 per single 
column centimetre 

Vat farther inforaatian call 
01-2488006 
Cl as sifi ed g eoui t m eat 


f 


Finance 



Surrey 







Our cilant is a £35mtumover joint venture 
company. EstabUahedto distribute a range of 
engineering products which enjoy a high reputationfor 
quality, the company is in a strong position in the market 
where it has no competitors across the whole range of 
its business. 

The Finance Director manages all aspects of the 
company ’s financial affairs including preparation of 
monthly financial statements and maintenance of aB 
statutory books of account. He, or she, ensures the 
preparation of tax returns in conjunction with 
professional advisers. Thareis a strong rfile in the 
commercial aspects of the business andthejob 
necessitates a dose control over cash and costs. Tfes 'is 
not aim ply an ordinary accounting function but one 
which requires someone who provides a strong level of 
commercial and business support for the Managing 
Director, including Company Secretarial duties. 

A salary of £27.500, with a bonus, and a fringe 
benefits package is offered. Candidates areimritedto 
send their rdsumdi in total confidence to th« 
Consultants handling the appointment at the address 
below. 

TheWdbeck Group 
Limited 

PANTON HOUSE. 25 HAYMARKET.lONpON 6 W 1 Y 4 B 0 . 


FINANCIAL DIRECTOR 

(designate) 

Our client is a well-established menswear 
manufacturer based in North-East London. Current 
turnover is £5 millio n and growing quickly. Public 
flotation is envisaged in due course. 

As a result of recent reorganisation the company is 
now seeking to recruit a new Financial Director 
(designate). The successful candidate is likely to be in 
the age range 30-45, self-motivated and ambitious to 
succeed. Experience of clothing manufacturing and/or 
re tailing is desirable. Above all however the person 
appointed will need the personality to respond to a 
de manding environment and rapid expansion. 

The salary package is negotiable dependant upon 
experience. Applicants should respond with a 
detailed c.v. quoting reference 7/49 to: 


Financial Controller — 
Retail jj 

London (West End} " 

Age 30+ c £35,000 + car 




to recruit a 
companies 


Our cheat is a major stores group which is seeking 
Financial Controller for a very laige sub-group or 
predominantly in consumer goods retailing. 

Reporting to the finance Dhwsoi; the Rnamial Controller will take 
responsibility for Financial and Management Accounts, Accounts 
' le. Stock Control Foreign Exchange Control Accounting for 
; and individual departments. 

Candidates (male or female) should have three to five years’ 
experience of retail environments, have first class academic and 
professional examination records and excellent communication and 
interpersonal skills. Experience of computerised accounting and 
modelling systems is essential 

Ifyou wish to be considered, griease submit you GV. to 
George Ornxrod BA (Oxon) Director; or Stephen 
Hackett BA (Oxon) at our London address quoting 
reference No-8182- 


FINANCIAL ft MANAGEMENT 

Douglas 

LONDON LIVERPOOL MANCHESTER 



RECRUITMENT CONSULTANTS 

Llambias 

EDINBURGH GLASGOW 



Douglas llambias Associates limited, 410 Strand, London WC2R ons 
■_T ti PPHflWRntAM 9501 — — 


PanlBebcr, H. W. FIsherA Co. 
Acre House, 69/76 Long Acre 
London WC2E 9JW 


PA TO PARTNER £30,000 + SHORT TERM 
PARTNERSHIP CENTRAL LONDON 

Gaiter opportunity for a young, hardworking ambitions ACA 
to assist with the development of this thriving practice. 
Unlimited potential is offered to a confident and 
commercially aware candidate capable of making a positive 
contribution to fulfill expansion plans^ 

ConUtecDorid Paton: 01-734-4S36. Alternatively write to 
Executive Search Dfrfefou, Finance Reen rift n enf , 

2/3 GobfenSquae, London, W.l. • • • ■ 



(Recruitment Consultants)-. 


CORPORATE CONTROLLER 

NR MaidadKad, Berks Up to £30,000 + Car 

Exception*! mwih in tbit MpnftaariH and retail pfe tot WjMMiftl the need for a qualified e cra wa rtant (under 
38) to take an overview of ncqubutioni and the nmdng of robtfcSanan. You sfcould have a highly developed retail or 
praqrfynfrri^ frvtirgtry harAyrrmtl and tnlcndid potential. _ 

DIVISIONAL ACCOUNTANTS _ 

VfetidtW. arvf flrarntum ' CS21&Q + Car 

Tbcw two petitions Save bees tasted a* a result of recent acquisitions by ow efieats who art market leaden in a 
aoctor wanh over tno biBioo poondft Yoa wifl be qnaHfiad (imder 40) and eriD provide fiuctiood manaoroiat for 
• these dtrisous. 

COMPANY ACCOUNTANT ^ 

raat o wMk rsniTu fJl^JOOtCo 

This and Mftaaiwg group require* a qualified **r»"i*an» (under 40) whi tgpen coce pttfo nly of 

and acmjjjititxn. The pMMil qualities r e qui it d me a Ugh level of enthusiasm, com mitme nt and 
wBBaiDai to be towed with company capannoo. 

SENIOR FINANCIAL ANALYST M - . 

NR West Dnyum, Middksex £24,000 + Car 

TWf subtidjsry of a US mohmatioosl, wvotatfln tbe el ect r onics fidd, rtqwres a qualified acc rona y fender 37), 
tehal by five stiff, yon will be respontiMe tor mruia) mini anmnwri'ti aoabtaS- reports apd unpcmrat i n g 
tbnacW comrots. Gndmates waft dn i uon et iat e the poteanai u> take on a fine m sngnn e wt rale. 

FINANCIAL MANAGERS 

fodhumn nd DmihUWb . t21,0 00 + Car 

'Recent aequrotfon of two profitdiie companies by • leafing UK group has kad to ib oppomnutyasr two quaizoed 
acroont^ (25-37). Reporting to the loeri Fbnndal Dinner yoe will have responsibility for the d*y to w neunpg 
- tfftbe Knonatby tfawrascnis and taake inpul imo strategic docuioii nwidiig. 


TEL 01-253 1216 (24 hrs) 


102 OLD STREET LONDON EClVftfff 


Deboo 
Executive 



THE ROYAL COLLEGE OF GENERAL PRACTITIONERS 
HEAD OF FINANCIAL SERVICES 
Circa £20,000 per annum 

The Royal College of Qeneral Practitioners is the a cademic body of general practice. 
It has over 15,000 members whose subscriptions generate an annual income of £1'A 
m and it has an increasing range of financial needs. 

We are now seeking a leader of financial services with the capability of developing 
the department as a major contributor to the management of the College as well as 
ensuring the efficient and effective completion of all Finance Department 
procedures, including the development of budgetary control systems and 
involvement in the installation of a new software financial package. . 

The' Head of Financial Services will- be a CCAB qualified accountant with extensive 
experience in a comparable institution or organisation and proven experience in a 
comparable management sitaatien-whieh need^notvhaye- been ij^a-heafth service; 
The successful applicant will be a member of the College’s senior management team, 
I underjthe direction of the_Qeneral Administrator, contributing to the determination 
f and achievement of the objectives of the Royal College.- inevitably the ability to 
work under stress is a prerequisite, as is knowledge and experience of working with 
most modem technology. 

The College actively pursues a policy of equality of opportunity and applications 
from suitably qualified candidates are welcomed reganfiess of sex, marital status, 
race or disability. 

For further particulars please contact the Establishments Officer, RCGP, 14 Princes 
Gate, Hyde Park, London SW7 1PU - Telephone 01-581 3232 Ext 256, to whom 
applications will need to be submitted no later than the 30th November 1987. 

Please Quote Reference: 46/SI 




MERCHANT 

BANKING 

Newly /Recently 
Qualified Accountant 


City 


c£20,000 + Mortgage Benefits 


Akterwick 

’iPeachell 

COPARTNERS LTD 


A rare opportunity for a Newly/Recently Qualified 
accountant to enter the Investment Management arm of 
a Big 8 UK Merchant Bank, with a view to progressing into 
Broking or Dealing. 

Your initial responsibilities will Include the provision 
of investigative analysis of listed companies, while 
developing existing management information systems 
and modifying intra-group charging methods. 

Aged 23/27, the successful ACA/ACCA/ACMA need 
not have previous exposure to the Financial Services 
sector as foil training will be given, but should be able to 
demonstrate a personal, informed interest in its ongoing 
activities. 

Please contact NICOLA LENDRUM Ref: 4373 on 
01-404 3155, at ALDERWICK PEACHELL & PARTNERS 
(Financial Recruitment Consultants), 125 High Holbom, 
London WC1V6QA. 


Prospects and Challenge 

Part ouaUfled Accountant 


/ > This international Briti sh e xploration 
company quoted on the USM has inter- 
national nmwts which ffidude oil, gas 
and Tnirwarai interest s. As a result of 
frM'imnnr»r l business activity it is now 
ywViwg to strengthen its accounting 

support. 

As Manag ement Accountant you will 
report totlteHxiandalCoinmjBeraiidbe 
lesportkble for the development and 

{^xiatfogcfcomputeisysteinsi^^mg 
rep o r tin g wri revtewing of overseas 
operations. As part ofypor brief you will 
»kn have considerable responsibility 


Probably in your mid 20's, you have 
completed Stage H of your ACMA. A self 
starter; you will be ambitious and 
appreciative of the challenges and 
future prospects that this position 
presents. An att r a ct i v e salary and 
package is offered. 

To apply please write with c.v. or 
telephone for an application form to 
Helen Stephens of Cripps, Seaxs & 
Partners Limited, Personnel Manage- 
ment Consultants, International 
Bmkfing* 71 Kfogwray kxricn WC2B 6SE 
Telephone 01-404 570L 


Cripps,Sears 



L 






.. ... s»****- 


Financial Times Tluiradatf 1987 


HEAD OF 
GROUP ACCOUNTS 

Substantial Salary + Car • Haywards Heath 


Assistant Treasurer 





i j .VJii * / # T * » u 4 J »:*»•/: ’-’ll »5n»l \vi~--y- • » * ~ :<«; i p y>> < ■ ■ 


created a major international insurance broking group. Building on 
our long established reputation for quality and integrity, we are 
commi tted ro a programme of significant and sustained growth, in 
which the Head of Group AccoimtswiUmakeapoativecontrilxitioa 
Operating at Manning Director level and reporting to the Main 
Board Finance Director ihe successful applicant will be responsible 
for the smooth running of all accounting services provided from 
Haywards Heath. The main responsibilities will be 

□ Effective line management of some 150 local staff and 
functional responsibility for accounting staff in provincial 
offices throughout the UiC 

□ Planning of work tn meet strict timetah le*; firr gmarp g^rtirfruy 
and management information, insurance accounting and 
treasury function. 

□ Enhancement of accounting systems. 

The successful applicant who must be a qualified Accountant will also 
hare fee ability to worit closely with entrepreneurial Managirg 
Directors working under intense pressure. 

It is unlikely that anyone aged under 40 would have the necessary 
maturity and experience for the post 

In addition to an excellent remuneration package, generous 
relocation assistance will be provided where necessary 
Applicants should write, together with a fall CV, to: 

Me E K McDermott, Group Personnel Director; 

Bain Clarkson limited, Bain Dawes House, 15 Minories, 

London EC3N 1NJ. 


Up to £30,000 + Gar + Benefits 


Oar diant is a major international 
groiqiinthebran^coDsmiftr 
products sector. The group is highly - 

profitable and is seeking to diversify 
into related areas. 

It is now seeking to expand its Treasury 
Departznaatwi^theE^jpomtmentrfa 
14gh caKbre Assistant Treasurer, in 
order to developthe treasury 
management operations within the 
group. 

The position reports to the Group. 
Treasurer and you will be involved 
pa riacnlar ly ™ the financing of tlw 
group in the UK and overseas, the 

iin^tn m ^iyn tnf mfth manggamop t/ . 

money transmission methods and the 
conduct of hanking relationship!. 
Suitable candidates will be aged up 
to 35 and are likely to be univers i t y 


graduates. An accountaricy 
qualification and relevant 


are essential, together with 


in itiative. * 

If you have the skills and 
ambition to succeed in this role, 
pleaae write or telephone 
endoemg full resume quoting 
Re£l51to> 

Nlgel Hopkins FGA, 

87 Jermyni Street, 

London SW1Y6JE. 

TW; 01-839 4572 

Cartwright 


BAIN CLARKSON 


lYTEH.VUHPiAL IXjl'MWC BaOKERS 


Landsdowne Appointments Register 
now have vacancies In London and 
throughout the country for 
Accountants aged 21-40 years. NOW 
SHORTLISTING Part Qualified. Nswty 
Qualified, Management, financial, 
Project aid Chief Accountants aid 
Financial Analysts. 

Our proven, FREE service Is the easy 
effective way to look around. 
Contact us NOW on 01-743 6321, 
quoting reference FTt/10, or write 
enclosing your CV to: 

Start Tan, Landsdowne 
Appatetemte Register, 

Park Hawse, 

207-211 The Veto, 

London W3 7QB. 


MANAGEMENT 

ONSUIXANTS 


client is a major pic, with a turnover in excess of £2 
in. involved in activities ranging From the mamifac- 
of high technology industrial products to brand name 
umar goods. It is an Innovative organisation' that r 
innes to grow both organically and by acquisition; . 

M«lt ^Hlm wirnio PlMndal . . 








> r .-I«.Tg * 1 U j.» 










HI 






Senior 

Financial Analyst 


C£24,0CCpa 


T7T 01 » i lA mmTiSi5 mTUT* D lSTl K 


In the oil industry success depends greatly on forecasting and planning 
In order to process in a votatBe, dynamic environment As a major 
International cd company with a turnover exceeding Siam worldwide. 
Occidental has already proved itself a successful company and continues 
totooktothefuture.WenowwtehtoappoimasirriBarty«o™ard-thlnklng 
irKiividLiaJtoioinahi^acttievlngtean%w^part!CularcorKJ^tork»g 
range planning relating to projects in Europe and Africa. 

You wiU be responsWe lor the evaluation of financial and management 
i nfor m at ion through the preparation of ten year and three year forecasts; 
participation in long term strategic analysis and the preparation of mortify 
management reports. 

Ideally a graduate, you wil certainly be an ambitious and energetic 
qualified accountant with at least three years* com m erci a l experience 
including exposure to US accounting practices. You’ll thrive on the high 
pressure associated with tight deadlines and be askilled communlcalor. 

Your efforts and expertise will be rewarded with a salary of c£24,000 pa, 
a range of company benefits and excellent prospects of further career 
development 

If you possess the potential to meet this challenge please write with fuB 
^ CV to Clyde Sorrell, Employee Relations Department 

Occidental International Oil kic., 16 Palace Street, London 
SW1E5BQ. 


Project yourself 
into an 
exciting new 

accounting role ' 

London c£23,000 

Our client is a renowned and; well established 
consulting and project management -company,, 
employing mainly professional staff, and operating ' 
in the UK and overseas. . 

Sustained expansion of the business calls for the 
creation of a new. post at the London head office, 
reporting to and understudying the Company ' 
Accountant Immediate specific responsibilities wiD 
be for the further development and management of 
a PuflP 088 designed computerised project costing 
system, and the enhancement of monthly manage- 
ment reporting. There will be opportunities to broaden 
into other areas of financial management and control. 
This role will be crucial to the company^ future 
prosperity 

Candidates should be qualified accountants with 
commercial experience in a computerised environ- 
ment Project costing experience would be an 
advantage but is not essential. This is an excellent 
opportunity for a lively and ambitious young 
accountant to make an immediate contribution to the 
company^ success and gain invaluable professional 
experience. 

Please apply with a full cv including current salary 
and a daytime telephone number, and quoting 
reference FT05, to 

BinderHavnlun mmmmmmmm 

9 MANAGEMENT CONSULTANTS 
Roga Bufl. Ewanwa Seleoioti Oivisnm 


B Si Bride Sroet Ionian EC 4 A 40 A 


COMPANY 

ACCOUNTANT 




£20,000 (Negotiable) 

Plus Benefits 


Regina Healths: Beauty Products pick ayoung, 
vibrant company who wish to appoint a qualified Accountant, 
responsible to the Financial Diredot for a wide range of day 


mm/uu, othasis mu- be placed upon ito 

DEVELOFMETrOrCOrtFUTERISED SYSTGNS AhD 

HAnAGQWrsira^^ 

THE posrnotl WOULD APPEAL TO HIGHLY IWnMRD, 

cowroira-imiuPE 

comKOLunoADcrARinQTr. . 

The remuneration package cwnprfsesofbenefitsnonnally 
associated wfth a suooessful and progressive company. 

fbr lid details of thiscareeroppomintty. please 
telephone or wtetofiard^CxeaitreAppo^^ 
have been r&ained to advfeepnthfcappoaitmeoL ' 

Tfourrqilywfflbedeaftwi^ 

Lionel Roseat: ' 

BAROAIfSEXECUnVEAPPOITfrMErfrS 

norliHoi)se58StaQonAppnfodiSouthRi&fipHiddiHA46SA. 
• Tdepbane:0HW2 1215 {24houn3/0l-8® 0675 


BARCLAYS 


FINANCIAL SELECTION AND SEARCH 



£43 per single 
column centimetre 

Premium positions 
wiH be charged 
£52 per single 
column centimetre 


For forthmr Infor mati on 
caM 01-248 800 


Tessa Taylor 
ext 3351 
Deidre Venables 
ext 4177 
Paul NtsravigSa 
ext 4678 


arn-T^.riirr 


ext 3456 
Patrick WflRanw 
•xt 3694 


Assistant Manager 

Coipoiate Finance Settlements 

Phmips & Drew Limited is one of the City’s leading financial 
' institutions, offering a wide range of services to its clients. One 
of the most rapidly. developing areas is Corporate Finance. 

Our expanding business has created ^opportunity within the 
Settlements area for an Assistant Manager to be responsible 
for all aspects of New Issues Settlements. Candidates, ideally 
within the 20-30 age range, must have a minimum of 2 years* 
experience in Settlements, preferably gained in a supervisory 
capacity. wjthki a Corporate Finance Department. A working 
knowledge of The Stock Exchange Quotations Department 
would be an advantage. 

The remuneration package includes a highly competitive base 
salary as well as bonus, mortgage subsidy and other generous 
benefits. ■ - 

If you would like to apply, please send your C.V. , or write or 
telephone for an application form to: 

SaBy Mew, Personnel Officer, 

PhIHips & Drew Limited, 120 Moorgate, 

London EC2M 6XP 

Telephone 01-628 4444 ext. 3132 

A MEMBER OFTHE UNION BANK OFSWITZERLANp GROUP. 

Vf. • ... yJ.t'.Sx*-.,- t l.i : . C. ' . 


COMPANY ACCOUNTANT 


Luton Based 


up to £25000-i-car+benefits 


We are the UK subsidiary of a Scandinavian health care group, marketing 
ethical pharmaceuticals throughout the UK and Ireland. * 

To strengthen and expand our Financial Services, we now seek, a Company 
Accountant, to head . a small busy, section covering a wide range of duties. 
Reporting fo the Managing Director, the postholder will be a pro-active 
member of the team, with the ability to lead by example and familiar with 
manual and computerised accounting systems. 

The ideal candidate must be a qualified Accountant- preferably Chartered 
- and rommerdally oriented with professional and business experience. 
Aged ideally 30-35, they will contribute not only to the smooth running of 
our Financial Services, but to the financial and strategic objectives of the 
Company through dose liaison with other function managers: 

Our modern, air-conditioned offices situated close to Luton town centre 
offer an excellent working environment, and in addition to an attractive, 
salary, the postholder will receive free BUPA, life, personal acrident and 
permanent health insurance, luncheon vouchers and four weeks holiday a 
year (rising on service). We provide' a first-class contributory Pension 
Scheme. 

If you feel you can make a worthwhile contribution to our future success, 
and axe prepared to work hard, please send brief career details and salary 
history in confidence to: 

H Liz Ledster 

Lundbeck Limited 
Ltmdbeck House, Hastings Street 
Luton, Beds^LUlSBE 




•KWBEfier witn excellent career prospects for the right applicant 
Ffease write with full CVto HidiardAMl^PERMarfagement 


ME168HR 




' / vxdtfckietimiP £5. election 












4 


Financial Times Thursday November 12 1987 


1 V 


. ‘"'If.. 
■ . - 




-with keen Commercial Skills 

to £35k + car South East 


Our client is the major subsidiary of a large UK based group operating in the 

fast-moving distribution and service sector. 

Reporting to the Managing Director, you will lead an established financial 
team $nd jnake a significant contribution to the future direction and 
successful development of the business through the provision of sound 

financial information and management advice. 

X‘ qualified' accountant you should have- excellent technical skills, an 
innovative and dynamic approach plus keen commercial acumen, ideally 
gained in the retail sector. Good management and negotiating skills are 
essential. Experience ofboth the appraisal and integration of acquisitions 
and diversification would be an advantage. . 

Excellent package includes relqcatio^assistance. 

Please write - in tonfidence-.witftfufl details including salary package, to: 
L PuIJan. ref. LP/B/4. List separately any companies with whom we may not 
discuss your details. . • r . 

MSL Advertising, 

52 Grosvenor Gardena, London SW1W OAW. 


FINANCIAL MANAGERS, 
CONTROLLERS & ANALYSTS 

Help us put British industry 
"back on the world map 


From £20-35,000 ■ Substantial Bonus • Car 


iL Advertising 


FINANCIAL ACCOUNTANT 

c. £ 23 , 500 pa+ car 


Our clkmi is part of an international, 

group mamifocf iiringanri martrrt liiga 

wide range of products in rhe industrial, 
agricultural, pharmaceutical aod 
consuni er fiekte. Based »» 
picturesque Thames Wiley, they offer 
tbdr personnel tbestaBiliry and - 
corporate strength that is emphatically 
demonstrated by their many dhddons 
and overaO £380m annual tnmovec 
This key position wm benefit 
considerably from the group’s 
international and diversified nature. To 
fulfil this demanding role you wffl have 
qualified in a recognised firm of 
accountants and gained subsequent 
experience within industry; A thorough 
knowledge of corporation, tax and 
famiifor ir y wi th mainframe accounting 


systems will greatly enhance your 

suitability for our client. . 

. If yriu ran hark ytmrarmmiting 
drills with assertiveness and a natural 
authority then you may well be that 
omyraiwUngrand idafe- Qppfflr >nwIHf« 
for career development in corporate 

yrmmrrmg ro Wiin Ihr g tntlp are 

uniquely attractive. The salary ofifered is 
highly advantageous and wffl be 
complemented by aquality company 


toan internationally successful 
companyAppIicaricms should be 
accompanied tyaCVand sent to 
Christine Richmond, 

r.mCTPnnrSwtrh In ifmaflfinaf ltd, 

178-202 Great Portland Street, 
London WIN 6®. 


Grvsvenor = 

C> 7 A 7777 /?A 7 > 17 TriA 7 > 


SEARCH ^INTERNATIONAL ITD 

Semrh&Seiectton, 178-202 Great Portland, Sinet, I VTNCff. HiLOl-631 5tS5 nrOt-65! 0.M& 


British manufacturing industry has just weathered 
one of the roughest periods in living memory* Many 
companies were overwhelmed by events ana have 
sunk without trace. The remainder have come 
through battered, bruised but a good deal wiser for 
the experience. 

Chloride is one of them. 

Altho ug h , it hasn’t been a particularly enjoyable 
experience, we have emerged as a leaner and 
altogether hungrier company. We are now aiming to 
be fit enough to take on any competitor anywhere in 
the world of electrical energy. The very fact that last 
year saw a dramatic turn around in pre-tax profits— 
from £500,000 to over £17 milli on -is evidence of 
our commercial recovery. Today, we have a new 
management team and a new strategy that makes 


every international product division answerable for 
its own profitability. 

This move has made everyone acutely aware of the 
bottom-line realities of lire. It has also placed a high 
priority on financial analysis, planning and control. 

That is why we are now looking for Financial 
Managers. Controllers and Analysts to work in our 
Product Divisions and Operating Units in many » 
areas of the UK and abroad, including our Group 
office in London. 

We require professionals from an international 
company environment who can confidently apply 
financial controls and sophisticated analysis 
techniques. Evidence of acquisition and joint 
ventures experience would he an advantage, 
especially in the case of Financial Analysts. 


If you share our belief that manufacturing industry 
is now emerging as one of Britain’s 
most exciting business challenges, talk to us. 
Chloride is powering back. 


Please write with fall cv to George Bramhill, 
Resourcing & Development Manager, Chloride 
Group Pic, 130 Wilton Road, London SWlV lLQ. 







World. Leader ii* Inspection Services 


Wlte are the world leader in the field of inspections, control, 
lestiig and loss adlustsiQ. We employ abort 20.000 people- We 
are operating In 140 countries and we invofca room than cane 
. . ' biWon USS In toes p.a. . . . 

We are pursuing an aggressive growth strategy which Inductee: 

ACQUISITIONS 

' Our PiwWarit has decided to appoint an 


who art! actively contribute to (ha Group's development by: 

• participating In the definition ot ecqrtsmons strategies, 

• sSemityHng and evaluating oppomnrirfw, 

• assisting m the decision making process. 

• participating in the negotiations tor acqrtsffions. 

• contributing to the Group's strategic p la nning process 

The executive, holder of this posfttan. wffl report to the top 
management of toe Group end be boated U our head offifie in 
Geneva, Switzerland. 

Appficents who qualify tor this position are between 35 and A0 
years old and are Swiss nationals or holders ofavafid working 
permit ■ 

They have an exceOont education background, combining 
preferably an engineering degree and an MSA 
They have seasoned experience h the field of acquisitions and 
cflvereification gained in a large i n tern at ional corporation. 

.. preferably in. the service industry. . 

They are fiyant in both French and English and (deafly have a 
command ot a third major language.' They are 'wiling to travel 
frequently. 

The compensation package is commensurate with (he 
reqtiiemeraft of the position. 

Please sand your application, in contidenco. (Smelly . to: 

SOCtETE GENERALE DE SURVBLLANCE SA 
Attn. Ur. £ P. Buchsi, Chief Pmonoal Officer 
P.OA ass, CH-1211. GENEVA 1 

Sodtoi GMnb de SlnaHance S A. 
Personnel division. Place 1 das. Alpes 1 . 1201 Genewi 




»nn i i'M ~ 




TMENT 
UNTANT 

Our client, a highly successful entrepreneurial 
group, has an excel lent record of growth and 
profitability. As S result, a decision has been 
• murlftri pp fahHgh an imiRsfanftrit Bcccrtmting 
function. 

Wbridng as part of a team of throe, with two 
investment specialists, the job holder will take an 
active part in the development and ru nnin g of the 
investment portfolios. In addition to handling 


measurement, tusxe will be con sider able involve- 
ment-in the i dfmtifinatirv n pnii implementation 
of appropriate computer systems. The role also 
embraces elements of research into possible 
investment opportunities. 

Candidates will be Chartered Accountants with 
lire ability to grasp the el e me n ts of a sop h is ticat ed 
corp ora te tax environment. -They will be self 
motivated, and ideally possess investment 
fl fyymftotig /tf ftlflmant experience, or a developed 
interest in these areas. 


Please apply directly to Greg Ripley at 
Robert Half , Roman House, Wood Street, 
London EC2Y 5RA. Telephone: 01-638 5191. 

Financial Recruitment Specialists 
■ I rm i\tm * BT rmmgham . Windsor 'Manchester 


British Airports Bfi 
Services V m 

Finance Director 

Package to £35,000 


Onr dtoat, British Airports Services Ltd, 
is a wbofly owned subsidiary of the recently 
privatised BAA which operates seven major 
airports within the UK. BASL provides a range 
of services covering engineering, planning, 
comp u t i ng, personnel, finance, retailing and 
catering to the BAA airports arid also markets 
itB expertfee on a worldwide basis. 

The poet, reporting to the Chairman and 
Mana ging Director, is a new one and the first 
task will be to determine the structure and role 
ot tire necessary small supporting department. 
Internally the Finance Director will be respon- 
sible for financial advice to the Board and for 
producing the accounts for BASL and its 
KibSkfiaries. Externally the key role wiD 
involve advising on the costing, financing and 
monitoring of UK and, most importantly, 
overseas consulting projects, and the raising 
of project finano* fo the international market. 
The majority rtf these are anticipated as being 
engineering orientated, e.g. terminal con- 
struction and other airport infrastructure work, 


although others could be in commercial areas. 
Candidates, male or female, must be graduates, 
fully qualified accountants, aged in their 30’s 
and have broad commercial experience. This 
must include work on overseas projects either 
for a consultancy or a major contracting or 
construction group. The role will be demanding 
and reqrires a determined and proactive 
person, to whom both the chaHe ngs of the 
immediate work and the excellent career 
prospects within BAA wiD be highly attractive. 
There will be same overseas travel and 
l anguag e ability would be an advantage. 
Remunera tion will indude a basic salary of 
around £30,000, performance related bonus, 
car, usual major Group benefits and relocation 
expenses, if appropriate, toBASLheadquarters 
near Gatwick Airport. Please reply with a full 
curriculum vitae, quothtg reference 1277, to 
David Thompson, Managing Director. 

Bufl Thompson and Associates, 

63 St Martin’s Lane, London, WC2N4JX, 
who is advising on this appointment. 


Bull 


Thompson 


CORPORATE AND RECRUITMENT CONSULTANTS 


GROUP FINANCIAL ACCOUNTANT 

NORTH HERTS, c. £22,000 - £25,000 + Car 

1 Our client is a &12m turnover manufacturer and. 
world leader in high tech products employing 350 people. 

Reporting to the FINANCIAL DIRECTOR, the : 
successful candidate wiD be & qualified AGA/ACGA/ 
ACMA aged 27-35, and essentially a setf-starter with good 
communication skills. With, the as si sta n ce of a small 
staff, he or she will nrenitor cash and treasury 
'management; prepare the statutory accounts, and 
exercise ■ control over lire maintenance . and 
implementation of an computerised accounting styfittUiu. 

The position offers great opportunity to assist irt the 
continued growth and profitabtiityof the company and 
has high visabfliiy.at board level Relocation assista n ce 
-given where appropriate. . . ■ : 

Contact: GEORGE D. MAXWELL 
:: ACC0UNTANCT APPOBilMENTS B0B0PB 
1-3 Mortimer Street, London WIN 7RH 
. . Telephone : 01-580 7739/7695 


ACCOUNTING IN THE CITY 


SYSTEMS ACCOIJNEWr 

; c£25,000&beneflts 

A major U.K. Investment bank, seek to 
recruit a qualified accountant to woHt in a 
systems based rote focused at tra centre 
ofthe banking organisation. 

Ybu w» be responsi&te for erthancsig foe 
general ledger system, ensuring its Secure 
ity and' extensive user liaison. Vbu wffl be 
25-30 with a keen interest in. and experi- 
ence of, accounting services. AMF0557 


SPECIAL PROIECTS AND 
ACQUISITIONS 

to£30^X)0&benefks 
A financial services group seek* "big 8" 
trained ACA with knowledge of the finan- 
cial sector. Duties wffl be varied but will 
include acquisitions, capital appraisals and 
other methods of expansion. 

You should be interested in joining a pro- 
gressive growth orientated organisation 
where a high earnings to head count ratio 
is important. RWS0556 


PLEASE TELEPHONE 0M565W1IO- Of homlM*5 9923> 

OR WRITE TO UBE ADDRESS BELOW 


Oil □ I Management Pereonnel 

10 Finsbury Square, LONDON EC2A 1AD 


Financial Controller 

£19,000 plus car High Wycombe 

Our client is the successful UK subsidiary of a large US 
conglomerate which manufacturers shielding systems for 
government industry and international export markets. 

The company Is now looking lo 511 the vacant position fora 
qualified accountant (preferably iCMA) to take responsibility for the 
provision of computerised cost accounting and management 
information systems. 

A sophisticated computerised accounting package, is In use 
including Lotus 1.2 3. with which you should be familiar. In addition 
a knowledge of UK management mfomation systems would be 
useful as you will also report toa US Financial Controller, as wei as 
the UK Managing Director. It is likely too that you will have worked 
within a small commercial environment and be able to 
demonstrate effective management and inter-personal skills. In 

tl rA w wBHii nffare an at lurtiiia mmiinaratinn nvlrsnn 


Please write wanjuiicvto wenara Miner, per Manageme 
Selection, London House, 5 London Road, Maidstone, Kent 
AAE168HR. 


/Aam&mPSefeefm 










DIRECTOR FINANCIER© 

LAS PALMAS DE GRAN CANARIA- ESPANA k 

Para ser incorporado a BLANDY BROTHERS Y CIA, S.A. - LAS EV 

PALMAS, empresa pcrtenedente a Grupo International, que opera 
acmalmente en el Sector AUTOMOCION, y que se encuentra en planes JhC> 
de expansion hatia otros sectores y actividades. ^ !• 

La persona seleccionada, luego de un periodo de mutuo Tm 

conotimiento con la empresa, para lograr su identification con la misrna m. 

y sus planes de desarrollo, fbnnara parte de Consejo. VL 

Se requiere: wjr 

• Formation profcsional acorde con el cargo y experienda en posioon similar, ® 

valorandoae la adquirida en el Ranto Automoviles con empresa/grupo S 

importante, de distribuidorcs o concesionarios de vehiculos. S' 

• Experiencia en desarrollo de sistemas mecanizados y finantieros. Buena « 

disposition para utilizar P.Cls m 

• Si es excranjero, se valoraran I os conotimientos del Sistema Fiscal EspanoL 6 

• Absolutamente bilingue Caste ll a n o - Ingles. 

• Persona de edad media, capaz de establecer buenas relaciones interpersonales M 

y adaptarse a la idiosincrasia de las islas, debiendo aportar dinamismo, ff 

entusiasmo y deseos de parti cipar activamente en la gestaon y desarrollo de K 

nuevos proyectos con visidn comerical y economico-financiera. 

• RESIDENCIAEN LAS PALMAS DE GRAN CANARIA. f 

Scofreee: M 

• Remuneradfin acorde con el cargo, altamente compecitiva. mr 

• Coche de la empresa. mf 

• Incentive. 

• Seguro de vida (3 x salario). JBt' 

• Otros beneficioc a considerar segun cadacaso. 

Enviar curriculum vitae, con 
fbtografia actual, mencionando ... 

la referenda ES- 1054/2, a: g^gjj ElllSt & WhilUiey 

CONSULTORES. Dpto. RECURSOS HUMANOS. 

Alberto Akocer. 24 26036 Madrid - ESPANA T tL (Oil 250 J8.0O 


THE SAMUEL LEWIS GROUP 


GROUP FINANCIAL DIRECTOR 


The Best Opportunities 
in Financial Management 
ior Hiah Flyers 


The BOGGroup is in an outstanding position to groom accountants 
for senior financial appointments. ... 

The Group is big by any standards. It has powerful market positions 
in each of its principal businesses around the world— industrial gases, 
healthcare, vacuum engineering and distribution-services. It has a 
strong international management team in the UK and some 50 other 
countries. It also has technological leaderships and substantial 
resources to develop new markets, products and services. The Group 
has an exciting future. 


Islington/City 


circa £ 28 . 000 + Car 


We are a wefl-established and expaTKting Group of fonr rostered hotismg 
associations and four further subsidiary companies. The Group has assets of 

ffifl rr»nH nn , a mnlH- mflTirm pn imd cap ital p mgramm i» and aw airniwl him nwrnf 

£4 million. We are now gearing up to take full advantage ofthe wide ranging 
opportunities made available bythe Government’s recent proposals fertile private 
fliMn ring oflio nsing gjgociatiom. 

Reporting diiectty to tiie Gxxnip(^ere3cectitive and supported by a Department of 

15 j n rl Tirting hoth q ualified par t-q ualified arwuin t a n ts and a TOmg VSfin, tilt 1 * 
F inancial Director has fill! regponatbflityfortlie fitTMipVs flnanHnl fnnfftimi. Thte 
indudes man a g e m e nt and control of the Group’s a sstrts. h uildlnganri ran trailing 

tt i eannual budgets, appraising new projects, m anagement repoit i iig, and as part of 

thesenitrrinmMg eiiimt teamermtritmlingtntlie^pieffpn rlt rraf-irm of the f»raiTp*« 

activities. 

Wie are looking fora wfl q ualified armi mta ntirith gnnd mrnmm rifll rw housing 

experience. This position offers a practical and energetic individual an excellent 
opport u nity to play a key role In an exciting orga n isa ti on with considerable 
potential f or growth. 

I f yn u a nulri Hire an tafarmnl dfacu—toll «WtM.pwrt wwifai* 

Simon Dow, the Group's C lriefRgeciiHve . Otherwise, please reply 


As a result of continuing growth and internal promotion, BOC is 
now looking for several high calibre accountants with an appetite for 
rapid career development. They will fill a variety of opportunities which 
currently exist in the UK in financial analysis, control and audit and 
general financial management. The.bpportunities are available too 
range of experience levels. They will be of interest to those who have 
recently qualified and those with up to five years' post qualifying 
experience. 

As well as a recognised accountancy qualification^ applicants must 
have a good academic degree in any discipline and obvious versatility. 

Candidates will be competing for first class remuneration packages 
and will receive relocation expenses where appropriate. • 

Please apply quoting ref. no.- FT 1 with full career and salary details to: 

Mr RG Page 

Chief Executive— Personnel 
The BOC Group 

ChertseyRoad . . V 

Windlesham 

Surrey GU206HJ 


THE BOC GROUP 


THE SAMUEL LEWIS GROUP 


Knights* Court. 6-8 St John's Square. 


London EC1M4DE. 


THephone 01-251 6091 


dosing date Tuesday 24th Nosranbei; 1387. 





m 


Financial 

Accountant 


City 


Salary £25,000 + Car + 
Substantial Profit Share 


Our client, a major international firm in the financial services field, holds an 
unrivalled position in its specialist areas. It now wishes to strengthen its financial 
team by the appointment of a Financial Accountant. 

Reporting directly to the Finance Director the successful candidate will have full 
responsibility for all financial accounting matters and the further development of 
recently computerised systems. 

Candidates, likely to be aged 28-32, will be graduate Chartered Accountants who 
can demonstrate proven academic success. Experience of, and a keen interest in, the 
management of computer based systems is essential and exposure to the Stock 
Exchange/securities industry would be considered an advantage. 

Interested candidates for this outstanding opportunity should send a detailed CV 
including current salary to Don Day FCA, quoting reference LM626, at Spicer and 
Pegler Associates, Executive Selection, 13 Bruton Street, London WlX 7 AH. 


il 



Spicer and Pegler Associates 

Executive Selection 


Financial Controller 

An opportunity for ayonog CA to join thesubsidiary of a major 
U.S. multi-national corporation at a very early stage in its growtii 

Central London c. £30,000 

Our client is the European subsidiary of a large U.S. corporation involved in television 
programme production and distribution and is now putting rogether ambitious growth plans 
for its European operation over the next five years. To help support these plans they arc 
Makin g to strengthen thwr fmannat function by the appointment of a Financial GmflroUa: 

Reporting to the Managing Director you will be responsible for all aspects of the financia l 
area. In the early days it will be a hands an role wiify considerable involvement in the 
development and impkanentation of systems, but yon will also be expected to progressively 
build a department to meet the changing needs of die business. 

We would like to talk to young Chartered Accountants, probably in their mid to late 
twenties who have gained at least a year or two of experience outside die profession after 
q ualify ing. Candidates should have a pro-active, goal orientated approach and the ability to 
create practical, cost effective solutions to business problems. 

Applicants of either sex should apply in confidence to Bob Wilson on (0962) 844242 
(24-bour service) or write to Johnson Wilson & Partners Ltd., Clarendon House, Hyde 
Street, Winchester, Hampshire S023 7DX, quoting ref. 786- 

Johnson Wilson & Partners 

Management Recruitment Consultants 


Financial controller 

East Midlands, up to £30,000 + car 

Thte extremely chal l engkig new appolntmernresutts from restructuring within a £100 
rraUiofi tumwer pte. They supply high quaBty products to one of the most 
demanding and ever changing fmeg sectors from a muffl-sHe, high volume, 
manufacturing faculty. 

Reporting to the RnancW Director, you wll play a major rota in the financial 
management of the business. You wil have key responsiMrty for putting In place the 
controls and regufatocs necessary tor monitoring performance and controHh g the 
cash resourcoa There vvfll be heavy empria^s on enhancing the existing 
computerised systems as wel as managing the production of ihe statutory 
accounts. You c&i expect to undertake a wide range of ad hoc assignments „ . 
connected with the development of the group. ' : 

A quaffed accountant, you win probably be aged around 35. Since qualifying you 
wIB have worked in similar fast moving manufacturing groups which have 
reputations for effective and innovative financial control. It is expected that you wil 
have played a key role in systems development and have a flar for managing . 


it is therefore obvious that here is a chance to make a major and highly visible 
contri bution, at a significant stage in the evolution of a large pto. In career terms the 
opportunity & surety irresistible. 

Write, enclosing a career r&surhe which Includes a daytime telephone number, to 
David Owens, ref. D26 Gl 


Coopers & Lybrand 
Executive Selection 
Limited 


& Lybrand 
Executive 
Selection 


22a The Ropewalk 
Nottingham NG1 5DT 


H><H 

HNANCAL 

KECRUFTMENT 

CONSULTANTS 


i...v 




Challenge of the City 
RECENTLY QUALIFIED ACA 
£22-24K + bens 

A major force within the world's financial 
markets, our diem now wishes to augment 
it's existing policy-making team. 

Unusually, they would like to meet with 
young ACA’s seeking a first move from 
practice who may not necessarily possess 
City experience, but who have the personal 
qualities and enthusiasm to make a 
successful career in this sector. 

Your inter-personal, analytical and 
investigative skins; will be highly tuned 
-and ybuuowsedB tfre cfialfenge of a new 
environment and the opportunity to 
develop further financial skills. 

To discuss this exciting and varied 
opportunity, contact me, Kjran Gartner, 
on 01-379 6668 (24 hrs), 01-370 7873 (out of 
.hours) orseod your CV to R H Associates, 
18 Exeter Street, London WC2E7DU. 



Financial Controller 


Yoikshiie 


To £25,000 + car + benefits 


ft g achieving tins by Broadening its range <rf services p ar tkadatiy in me area of untt 
finked business. 

Tfte rob of the Financial Controller, who will be part of the senior management team, 
will be to control the total accounliiisftmctiai&, improve esistine' computerised 


management reporting systems and hdp to dcadop new services. 

Candidates must be young quafified accountants wkh a p p ropri ate professional 
experience and good cotmneidal exposure m a financial services envaonmeuLThey 
must have a sound knowledge oi computc isad systems and the pezsonal qualities w 
earn die confidence and respect cf staff and coQeagoes. 

the 

es a range of benefits such as a car and subsidised mortgage. 

If you are interested, please write in confidence to AndrevrlSfiddson FCA, endamw 
a full c a ree r ifom nfi, at Adamson & Partners Ltd, 10 LfebonSqnaie, Leeds LSI 
IfeL (0532)451212. 


ADAMSON & PARTNERS LTD. 


Executive Search and Selection 


FINANCIAL CONTROLLER 
STOCK EXCHANGE COMPANY 


An expanding financial services group requires a 
financial controller for its stockbroking 
subsidiary. 

Candidates should be qualified accountants with 
some post qualification experience. The 
successful candidate will oversee all aspects of 
financial control systems, including credit control 
and budgetary disciplines. 

A salary of £20,000+ together with an interesting 
benefits package is envisaged. 

Send a fUII CV to: 

The Managing Director, 
v . Box A6707, Financial Times, 

10, Cannon Street, London EG4P 4BY 


CORPORATE 

ACCOUNTANT 

Applied Communications Inc of the USA, the world's most 
popular EFT software Vendor is seeking a highly qualified 
dynamic and ambitious young Accountant for a two year 
special, assignment in connection with a US related project in 
the UK, working out of Applied Communications UK Ltd 
offices in Watford. The ideal candidate will have a de g ree level 
US accounting qua l i fic ation, at least four yean general 
accounting experience, and an intimate knowledge of US 
accotmting procedures and income tax matters. A CA 
qualifica t ion and first hand experi ence in the me of computers 
wouldbe an advantage. A competitive sakry and excellent 
benefits package wig be offered to ihe right candidate. Please 
reply with CV toe 

Bex A0712, nnandal Times, ' ‘ 

10 Cannon Street, Louden, EC4P 4BY 











21 


We set more 
wheels 
in motion 

RJHOARE 

Leasing Limited 

KrwuMfaMtnwO'J MiWWniwiniMniwMn 
30 P , *w»«>Mtt 8 a li " — m i terming mi V narnMn Urn <« 



SECTION n - COMPANIES AND MARKETS 

FINANCIAL TIMES 

.. Thursday November 12 1987 


WORLD’S Nol 
IN PLUMBING. 


i 



Southland fails again 
to raise $4bn in 
junk bond finance 

BY ANATOLE KALETSXY IN NEW YORK 


SOUTHLAND CORPORATION, 
the large Dallas-based owner of the 
7-Eleven chain of convenience 
stores, hag p nwfp wj as latest ca- 
sualty of the miTapw* of confidence 
of Wall Street 

The company failed for the sec- 
ond time to raise S4bn in bank and 
junk bond finance needed to com- 
plete a c on troversial leveraged boy- 
out by the founding Thompson fatn- 
ily. 

The faOlM nun-lrc g fhqmrfal set- 
back which could have costly and 
embarrassing imp li c a tions not tally 
for Southland, but also for its lead 
investment bankers, Goldman 
Sachs and Salomon Brothers, and 
the whole junk bond market 

The SUbn Southland band offer- 
ing had been viewed as a touch- 
stone of the wwitimtmg liquidity of 
the junk bond market after last 
month's Ffamnwai crash. 


Salomon and Goldman’s decision 
to withdraw the offering “on tte ba- 
sis of market conditions* 

leaves than seriously exposedto 
any financial dlff**™** 11 * which 
Southland might face. 

Goldman and s»tennn had adv- 
anced Z600m between them to the 
Thompson family as part of the fi- 
nance for fin Southland leveraged 
fri i y r m t Repayment at that Tjridge 
loan," as well as a KLlbn “tender of- 
fer purchase facility" from five com- 
mercial famine led by Citicorp, de- 
pends on. fiie company raising 
Pfww a iMw i t ffrii mri n g by February 
28 next year. 

The two investment banks’ 
bridge bans, rank below the com- 

mwrijil hanlr finjtnffjpg bl tenift of 
their security against Southland's 
assets, and the see of this exposure 
has caused some concern among 
Salomon and Goldman sharehol- 
ders and partners. 


AT&T boosts spending 

BY RODERICK ORAM M NEW YORK 


AMERICAN Telephone and Tele- 
graph (AT&T) announced yester- 
day a sharp acceleration of Its ex- 
pansion plans for its worldwide di- 
gital Inwp^ithmf jp l Mwnm i iiii M *. 

turns network. 

Know hopes to almost double the 
network from its existing 45JD0S 
route-miles to 88,008 by 1891, 
against the previous goal of 74000 
miles anno u nced hurt January. 

Capital spending on the system 
will increase from S2jbn to $3ba a 
year in 1988 and 1989. 

Given favourable market condi- 


tions and fiie' potential for healthy 
financial returns, AT&T erporia tO 
mai n tain the level of capital spend- 
ing in subsequent years. 

By 1981, abort 87,000 . miles wm 
serve 400 cities in the US, against 
300 at present, with the remainder 
of the network serving key points in 
Europe, Che Far East and the Carib- 
bean. 

AT&T sart thrt demand far <£gi- 
tnl services for data, voice and video 
transmissions was growing at abort 
20 per cent a year. 


O&Y lifts 
stake in 
property 
developer 

By David Owen In Toronto 


OLYMPIA ft YORK, the private- 
ly held prop er ty wd re sour c e s 
empire controlled by Toronto's 
Bridmuum brothers, haa boost- 
ed its stake in Campean, the Ca- 
nadian property developer, to 
abort 8 per cent of outstanding 
subordinate voting shares 
the purchase an Tues- 
i mdi shares. 

In addfokm, the company ven- 
tnred into the bond mrnrket to 
buy C$500,000 (USS37MO0) 
principal amount of 7.5 per cent 
Series' A Campeeu conver tibl e 
subonfinate dc bc ntnr c s, which 
are cunertly convertible at 
C33LS0 per srtnrdinate voting 
dun. 

Besides its Nove mb er 10 pnr- 
& York said it 
7m subonfinate 
voting shares end C$28.7m princ- 
ipal amount of de b enUu e a. At 
last report there were abort 
4i3m Cempeaa subordinate vot- 
ing shares mifoio mKng 

The company said the acquisi- 
tions were made for in v e stm e nt 
purp o s es . D apewfin g on prevail- 

feag i i imSi* mid oi M H —ii f yfluK- 

tions it added, it “may increase 
to investment in Campcan fa> the 
open market, by privately nego- 
tiated transactions or otherwise." 

On flu Toronto Stock Ex- 
change an Tuesday. C ampea n 
shares dosed up CSX at C$14, 
well below the rate at winch the 
debentures held by Obmnia ft 
York are 


James Buchan and David Owen on obstacles in the way of a $9.9 Sbn sell-off 

Price likely to derail Santa Fe’s cash sale 


A WEEK AGO, quietly and without 
fanfare, a substantial piece of the 
US came up fin: sale. 

For collectors of large-scale 
Americana, the auction Is very im- 
portant: it vast tracts of 

western desert and grating land, 

stands tf timber and reserves of oil, 

ga s anH coal, four pipelines, two 
railways, a section of down-town 
s»n Francisco pmii oddities as 
a leasing company and a construct- 
ion business. 

The only drawback Is the price. 
The Santa Fe Southern Pacific Cor- 
poration is asking SO Jfflm for its as- 
sets, every last dollar of that in 
cash. 

The transaction would dwarf any 
ever attempted outside the elephan- 
. tine dl-industiy mergers of the ear- 
ly 1080s. Even before the US capital 
markets slid into chaos on October 
19, the deal would have been tough 
to finance. Since October 19, it has 
looked next to impassible. 

Thi«i weeks failure by the foun- 
ders of Southland, a Texas conveni- 
ence store riiftfa, to raise a mere 
SLSbn in bonds to pay fear taking 
the company private shows just- 
how chary US investors have be- 
came of financing corporate take- 
overs. 

But with Santa Fe, the scrap val- 
ue of the assets may just make the 
deal possible. Two formidable 
groups of businessmen - Mr Mi- 
chael Dmgman’s Henley Group and 

the Hoinhitiwmi ■farnRy of Toro n to — 

have been taking a bard look at 
Santa Fie. And there could be a 
third party, Mr Tony Hatch, a stock 
analyst at fiie Wall Street firm of 
Argus Research, believes. 

Santa Fe, which last year report- 
ed net income of 1207m, on reve- 
nues of SBAbn, began life as the 
Atchison, Topeka and Santa Fe rail- 
way, just before fiie CSvfl. War, and 
flourished by transporting cattle 
brought by Texas oo w bo ys to file 
railhead at Dodge City. 


Mr Michael Dingman is 
chairman of Henley 
Group, one of two for- 
midable groups of busi- 
nessmen who have been 
taking a hard look at 
Santa Fe, which last year 
reported net income of 
$297 m. The other is the 
Reichmann family of 
Toronto. But as recent 
events have shown, in- 
vestors have become 
chary of financing cor- 
porate takeovers. 



As the railway pushed its way 
west, it received so much land in 
the form of federal grants that it 
eventually **«*»"« more a natural 
resource and property company 
than a railway. 

By 1980, it had shrunk to a high- 
cost transporter of coal and grain, 
but the oompany was still flourish- 
ing. 

That year, Santa Fe's manage- 
ment mada a disastrous mistake. 
As deregulation swept the railway 
industry, the group tried to merge 
with the ageing Southern Pacific, 
whose 13^)00 miles of trade run par- 
allel to large stretches of the 11 , 000 - 
miie Santa Fe line. 

The merger was completed in 
1083, but was never approved in 
Washington. After three ye ars of 
parnfai hearings, file Interstate 
Commer ce Commission threw out 
the merggr wg munmipwtHlviL 

Last July, the company was or- 
dered to dispose of one or other of 
the railways. The commission's rul- 
ing left Santa Fe in chaos - and 
dangerously vulnerable. Its chair- 
nun, Mr John Srhmirft , resigned in 

ffiRfflKt- 


The group duly solicited offers for 
the barely profitable Southern Pa- 
cific railway and last month said it 
had received seven proposals, from 
other operators and even labour 
unions, ranging in price from $750m 
toSUibn. 

To Wd off an increasingly vocal 
constituency of shareholders, led by 
Henley with more than S per cent 
and flie Reichmanns with more 
ttm 6 per cent, Santa Fe's new 
nimrrmHn l Mr Robert Krebs, an- 
nounced to repurchase about 
S3bn in stock and to sell off half a 
dozen modestly profitable bust- 


Then the *tnnTr market crashed, 
fwMwgr mnph of the restructuring 
plan with it The buyers for South- 
ern ^cific have apparently shrunk 

to four, Im-luding mrinm anrl mftn- 
ap mm t . and the nearby Nan— 

CSty Southern railroad. 

Henley bought depressed Santa 
Fe stock in the market to raise its 
stake to 14.7 per emit. And in a dra- 
matic turnround last week, Mr 
Krebs challenged both Hmxley and 

th e WeieWrnnwn brother* to coma Tip 


with c as h offers of £63 a share for 
the entire company. 

Both groups are well-capitalised. 
Henley is a most unusual company, 
modern America's nearest equiva- 
lent to the “blind pools” that so en- 
ticed investors in fixe 1920s. 

It consists of a string of dim busi- 
nesses in such areas as waste-treat- 
ment and soda ash, detached from 
the Allied s» gn»i conglom erate a 
year ago to act as a platform for the 
deal-making aMlitifes of Mr M ichael 
Dingman, Henley's 56-year-old 
chid executive. 

“Dmgman’s dogs" was Wall 
Street's nickname for the company 
when it was floated publicly in May 
1986. But investors' enthusiasm ran 
wiki. 

Mr Dingman raised SLlffbn in in- 
vestors’ money - in spite of stating 
unequivocally in his prospectus that 
"Henley has no specific plan for use 
of such proceeds." This year, the 
surfeit of capital has been some- 
thing of an embarassment 

In July, Mr Dingman «*vnn mired 
plana to buy back $7 00m of the new 
stock. But the company has already 
sunk more than SI bn into Santa Fe 
shares and could probably draw on 
credit lines of S2bn or more: ewjugh 
to pick up parts of Santa Fe, if not 
foe whole firing 

Santa Fe said last week that Hen- 
ley had offered $63 a share, but only 
in the form of cash and securities - 
and the company was looking for 
cash only. 

The Reichmanns’ company, 
Olympia & York Developments, is 
not even publicly quoted. But with 
needy 10 per cent of Manhattan's 
premium office space, the Toronto 
group is the largest real estate de- 
veloper fax North America. 

The group is run by three devout- 
ly orthodox axxd intensely private 
brothers - Albert, Paul and Ralph. 
Starting with their first plot of land 
in 1965, they scored a notable coop 


by buying into Manhattan at the 
time of New York’s near bankrupt- 
cy: their 5350m investment is 
thought to be worth nearer $3bn 
now. 

Making full use of the S800m or 
so which their buildings are said to 
generate in annual ca$Ti flow, toe 
Reichmanns have diversified out- 
side North America, with London’s 
Canary Wharf project, and into oth- 
er fields, such as natural resources. 

These diversifications culminated 
in two ambitious recent takeovers, 
valued at CSSbn (USSASbn) in total 
- Gulf Canada, the country's 20th- 
largest company, and Hiram Walk- 
er, the distilling and energy group. 

Tbe Reichmanns are thought to 
be primarily interested in Santa 
Fe’s property; not so much the 3m 
acres of farmland, range and desert 
as some 28,500 acres of commercial 
and industrial real estate and, 
above aU. the 208 acres of the 
Mission Bay district of down-town 
San Francisco. 

The properties yielded $322m in 
inrvimp hwH gains last year, which 
would put a value of about $5bn on 
fixe estate. 

But tbe Retchmanns’ other hold- 
ings, such as a controlling stake in 
Abitibi-Price, the newsprint produc- 
er, and 41 per emit of the Interpro- 
vinrial Pipeline, give them signifi- 
cant overlap with Santa Fe's timber 
and natural resource busin e sses. 

“Olympia & York is knowledge- 
able in four of the main businesses 
which Santa Fe has,” tbe company 
said in Toronto this week. 

Whether the Reichmanns «m 
muster an offer for the company is 
open to question. 

Wall Street’s arbitrageurs have 
been so badly battered in toe past 
month that they are hedging their 
bets. Santa Fe’s stock was trading 
yesterday at about S5L This does 
not suggest that a cash offer of £63 

to in flip nfffnp 


WkVf&vurilii'shtnrnni Iwn rvgistfml under Ihe lluitnl Stales Sixvrilkv/M of ISttaml iruynrt. d>‘;wri vfth? . j 

ifisIribitMi tfk-n-ftr tvottciat nr ddhxml dimllyor indinxliy in the Uiiiloi Static or to LbfiirfStatiXfvr&it^ , . 



US. $100,000,000 

NEWS INTERNATIONAL pic 

9 % Guaranteed Bonds due 1990 
Convertible into U.S. $100,000,000 
Guarante ed Floating Rate Notes due 1990 

All unco ndi tionally and irrevocably 
guaranteed by 

THE NEWS CORPORATION 
LIMITED 

Issue Price W0 1 A% 


BANQUE PARIBAS CAPITAL MARKETS LIMITED 

BANQUE BRUXELLES LAMBERT S.A. 

CITICORP INVESTMENT BANK LIMITED 
COMMONWEALTH BANKOF AUSTRALIA 
CREDIT SUISSE FIRST BOSTON LIMITED 
DAIWA EUROPE LIMITED 
DEUTSCHE BANK CAPITAL MARKETS LIMITED 

I DRESDNER BANKAKTIENCESELLSCHAFT 
KLETNWORT BENSON LIMITED 

MORGAN GUARANTYLTD 
PRUDENTIALJACHE capital FUNDING 
SUMITOMO FINANCE INTERNATIONAL 
SWISS RANK CORPORATION lNTERNATJONAL UMITED 




International Signal & Control Group PLC 

US$125,000,000 
Revolving Credit Facility 

Arranger 

Swiss Bank Corporation International Limited 

Lead Managers 

Amsterdam-Rotterdam Bank N.V. Bank of America NT& SA 

Commerzbank Aktiengesellschaft Deutsche Bank AG 

The Hongkong and Shanghai Banking Corporation The National Bank of Kuwait S AK 
National Westminster Bank PLC Swiss Bank Corporation 

Managers 

Credit Lyonnais Hamilton Bank 

Westpac Banking Corporation 

% 

Agent Bank 

Swiss Bank Corporation International Limited 

September, 1987 

Swiss Bank Corporation International 

V ■ - ' 











i - ^ ^ Jxt 




22 


Financial Times Thursday November 12 1987. 


U.S. $7,000,000,000 



The Republic of Italy 

Floafing Rate Notes due 1994 

frv accordance with the piwteiore of ttw Notes, notice a hereby given 
that for thfftoleiest Period from Norember 12, 1987 to May 12, 1988 the 
Notes win cany an interest rate of 7VS% per annum. The interest 
payable on Ihe relevant interest payment date. May 12, 1988, wfli be 
U.5. $379.17 per U.S. $10,000 coupon and U.S. $10,000 nominal 
amount in reaistored torn: U.S. $1,895.83 per U.S. $50,000 coupon; 
and U.S. $9,479.17 per U.S. $250,000 coupon. 

By: The Chase Manhattan Bank, NA 
London, Agent Bank 

Novembers, 1987 


o 


U.S. $200,000,000 


Exterior International Limited 

{Incorporated with timited BabSty in the Cayman Islands) 

Guaranteed Flaatingflatetlafeas due 2001 . 

UnoondttkxiaByGiiaranteedastDpaymaTt 

of principal and Interest by 

Banco Exterior de Esparta, SA. 

(Incorporated with Unvted habifttyin The Kingdom of Spain) 


Notice is 


November 12. 1987 to May 12, 1988 the No rot 
Rate of 7%% per annum. The interest payable i 
payment data. May 12. 1988 will he U.S. $373 


that lor the six months Interest Period from 
1988 the Notes win carry an Interest 
fable on file relevant Merest 
payment data May 12 . 1988 will be OS. $372^5 per U.SL $104X10 
principal amount of Notes. 

By: The Chase Manhattan Bank, NJL 
London, Agent Bank 

November 12, 1987 


o 


INTERNATIONAL COMPANIES & FINANCE 


Jacobs 
Suchard 
sees strong 
growth 

By Oar Zurich Correspondent 

JACOBS SUCHABD, the 
acquisitive Swiss coffee and 
chocolate concern, yesterday 
forecast a 5 percent increase 
in aalee for this year and said 
that, profits would improve 
markedly. 

According to Mr Charles 
Gebhard, a board director, 
profits for for 1987 were 
heading for an increase of 
between 30 and 40 per cent. 
Last year net earnings 
totalled StfrlSlm 
Dating the first half of this 
year group turnover 
increased by 14J5 per cent to 
some SFAMn, with net earn- 
ings about 30 per cent ahead. 

The sales growth reflected 
a aeries of acquisitions, 
including the integration of 
Monhelm, the German choco- 
late company, and a string of 
takeovers including £J. 
Brack, the Chicago-based con- 
fectionery group, and Cote 
d’Or, the Belgian Chocolate 
group. 


Paul Betts on the French appetite for management takeovers 

Paris gets a taste for buyouts 


invol 

steel 


leveraged MANAGEMENT 
buyouts (LMBOs), or reprise 
d'entmprisB par ses salaries 
(RES) . as -the French prefer to 
call there, have started to make 
serious . Inroads, in French busi- 
ness. France is still about two diay of 
yean behind the UK in this field 
according to French LMBO spe- 
cialists. But the number and size 
of management buyouts has 
been steadily rising. 

The French Government, 
which, has decently amended 
LMBO legislation to make man- 
agement buyouts more attractive 


Industries, a tructuring which has recentred 
j manufacturing subsl- • the gr oup round its core car cant- 
faleo,. the French -car ' portents 


and quicker to 
privatised the ‘ 


. baa 
de Devel 


Mr Michel Guiuiet, who has 
opened an office in Paris for ! 
ing Capital Investors, the subsid- 
iary of Baring Brothers which 
lalises .in -LMBO& says the . 
ard operation he helped 
could boost the image 
MBOs in France fay showkxg 


oppement Industrie! (IDI), the has also given Baring a -good 


stale financial institution speci- 
alising in venturfe capital and 
capital' development 
through a FFrL48bn 
LMBO this summer. 

. At the same time 
groups have 
to LMBOs to spin 
medium -sized rum-strategic sub- 
sidiaries to their managers feather 
than sell them to competitors. 
This has been the case in respect 
of the Thomson defence and 
electronics group and the Saint- 
Gobain pipes and glass cancan, 
among others. 

Other LMBOs have involved 
the SMT-Gonpil microcomputer 




New Issue 
November 12. 1987 


This advertisement appear* 
as a matter of recfrtrionV. 


News international pic 

(Incorporated with limited liability in Great Britain) 

London, Great Britain 

DM100,000,000 
6%% Bonds of 1967/1992 

unconditionally and irrevocably guaranteed by 

The News Corporation Limited 

Sydney, Australia 

Offering Pricer 99’A% 

Interest: 6K% p. a^payaUeanmsaHy on November 12 

Redemption: November 12, 1992 at par ^ 

Listing: Frankfurt am Main 



Deutsche Bank 

AktiengeseBschaft 

BanqueNatippale dieParjs SJX- & Co*, BanquePanbas . . 

(Deutschland) oHG . ' - Capital Mari'et&.GaibH' 


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V- 


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AlQamene Bank Nederland N.V. 

Banco dal Gottardo 

Bank of Ibkyo (Deutschland) 

Akttangaaollschwt 

Job. Beranborg, Gosader a Co. 

Deiwa Europe (Deutschland) GmbH 

DG Bank 

Deutsche Gano aaan achaftafaao k 
Georg Houck A Sotei Banklara 
Kommandfagssellschaft auf Aktian 

Landeabank Rhainland-Pfaiz 
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Merrill Lynch inter na tio nal a Co. 

Mitsubishi Trust Inttmational 
Limited 

Nomura Europe GmbH 

Rabobank Nederland 
Swiss Cantonalbanks 


Drestf rier Bank 

Aktiengesellschaft 

Schweizarischer Bankverein 
(Deutschland) AG 

Arab B a nkin g Corporation- 
Dabs StCou GmbH 

Bmud Lambert: MV. 


Commerzbank 

'Aktiengesetischaft. 

Morgan Stanley GmbH 




>;■? fc 


Banque Gbnfealedu Luxembourg SA. 

Berliner Bank 

Aktiengueilschaft 

DeOsrOcktCa. 

DSL Barit 

Deutsche Siedhing#- und LaiKfarantanbank 


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Meroard. Stein A Co. 

B. Mstrier aari. Sohn l Co. 
Komcan&oewBsctah auf Aktian 
Morgan Guaranty GmbH 

Nofddeutscho Landeabank 


Salomon Bretfa e rs AG 
Swiss Volksbank 


M. M. VVbrtairg-Brincdtmann, Wlrtz* Co. 


1Hfc M t,le,,fei-ha I amlndlienL 
1IMUIWIIII I III UnMiiaijirw 

Gk 


Trinkaus & Burkhardt 

KommanditgeseOschaft auf Akfaen 


Baden- WO m e m bra tache Bank 
AktiangaseltechBft • 

Bank (Or Gsmelfiwirtacliaft 
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Bayerischa Varainsbank 
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Deutsche Giroontnle 
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Industrlabank von Japan fOeutaahfsnd) 
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Merck. RnckACo. 

Mitsubishi Finance International 
Limited 

The Nikko Securities Go. 

(Deutschland} GmbH 
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wwirawnoBiw 

Aktlengewlkschaft 


Wood Gundy Inc. 


Yamwcri h t ta m ational (Deutschland) GmbH 




:: 


COMPAGINLE I I \ V NCI KHK DE CREDIT 
INDUSTRIE!. I I COMMERCIAL 


Consolidated first semester results, 1987 


The Board of Directors of Compagnie Financiere de 
CIC mrton October 7, 1987, under the chairmanship 
of Mr Jean Saint-Geours, to review the consolidated 
financial statements for the first semester of 1987. 
Figures show an increase in the volume of business 
of CIC Group compared with the corresponding 
period in 1986 (loans to customers up 8,7 %; deposits 
up 1 5 %). This growth and rising revenue from com- 
missions have maintained net banking income at the 
same level as last year, despite shrinking margins 
and falling revenue from securities trading. 

Alter allowing for overheads and depreciation (up 
6 %), operating income before provisions totalled 
FF 1,276 million, against FF 1,5*1 million for the 
first half or 1986, which was an exceptional year. 
When set beside the mean of 1985 first and second 
semesters, which offers a more realistic basis for 


comparison, this year’s performance represents an 
increase of 19 %. 

Now that provisions have reverted to their 
customary level (after a very sharp rise in 1986), and 
barring unforeseen events, consolidated net income 
for 1987 as a whole should be com parable to the 1985 
figure. Consequently, Compagnie Financiere de 
CICs consolidated net income is unlikely to be less 
than FF 35 per share. 

The Board of Directors also approved a plan to trans- 
fer the French state’s equity in the CIC Group’s 
regional banks to Compagnie Financiere de CIC This 
proposal will be 'submitted to a forthcoming Extra- 
ordinary General Meeting of its shareholders for rati- 
fication. Its purpose is to enable CIC Groop-to list 
shares in Compagnie Financiere de CIC subsidiaries 
on regional stock markets, at the appropriate time. 


CO 


GRQUPE CIC 

CRfcDrT industries, ft commercial de wros. soafrit uonnaise de banque, BANQUE DE LTJNION EUBOPfiENNE, 
CREDIT INDCSTR1EL DWLSACE ET DE LORRAINE. CREDIT INDUSTRJEL DE LTXJEST. SOCI&It NANCOENNE VAR1N-BERN1ER. 
BANQUESCALBERT DUPONT, CREDIT 1NDUSTRIEL DE NORMANDIE, BANQUE RfidONALE DE L*)UEST,SOClfcr£ BORDELA1SE 
DC CftflHT INDUSTRIE!. ET COMMERCIAL BANQUE lU-GlOfNALE DE L1UN, BANQUE TRAN&ATLANTI Q UE, LTVION DE BANQUES 
REG ION ALES, BANQUE BONNASSE. CIC-UNION EUROPEENNE. INTERNATIONAL ET CIE. BAIL EQUIPEMENT. 


group and Jeanaeau, a leading the -.management control of Mr French venture capital aseoda- 
manufacturer of pleasure boats. Carlo DeBennedetti, the Italian tioh, showed that as many as 
But an. even more significant entrepreneur. Since then, V«Jeo 10,000 small and medium -sized 
LMBO has -Just, beeii' completed has been involved In major res- companies, employing between 
ADevard Industries, a tructuring which has recentred 50 and 1,000, had company 

chairmen who would be readi- 
ing re ti rement between now and 
the end of the decade. 

Although LMBOs are clearly 
not the only solution for compa- 
nies with succession problems, 
Mr GaiUet suggests that a care- 
fully prepared management buy- 
out can provide an alternative to 
the sale, usually to a competitor, 
of an enterprise when a chair- 
man or owner steps down 
Baring Capital Investors with 
LMBO fund of Ecu60m.' 
is develc. _ 

ur approach to the 
management buyout business, 
Mr GuHIet said. Apart frore Lon- 
don and Paris, the specialised 
LMBO s a fa&MIa iy of the British 
merchant bank Is also opening 
an office In Munich. 

Mr Guillet says that the Hazing 
team -of LMBO specialists are 
studying the possibility of 
mount ing multinational LMBO 
operations in Europe. “I think 
you will start seeing big and 



the sellers. The operation 
t given Baring a -good 
start in, the fledgling French 
LMBO business. 

Up to now, LMBOs have suf- 
fered from a somewhat negative 
image - th^ were seen as pro- 
French vidmg a solution far the prob- 
iy turned leras of lame duck companies. 
small or "But I think with Allevard we 
have shown that it -can be a prof- 
itable operation involving a 
" ‘ Gurnet 


an 


healthy concern,” Mr 


. with annual sales of 
FFiSOOm and employing about 
1,350, came into Valeo T s orbit 
last year during the capital 
reconstruction of the c 
nents group when it came ■ 


Although Allevard was a prof- 
itable subsidiary, Valeo’s new 
management was attracted by 
the LMBO proposal since ft 
would enable the group to make 
a capital- gain out of the opera* 
turn as wdl as shod an operation; 
which was not regarded as stra- 
tegic. 

With the LMBO Involving 
nearly FFrSOOm, Valeo e x pec t s 
to make a capital gain of about 
FFxSGm. The operation is also 
the Wggast-Jndustttal UQ30 in- ahsad 
France, since the SOI Inyoufi last 
summer did not strictly involve 
the buyout of a distinct indus- 
trial concern, but of an. Invefti- 
ment institution. 

Mr Guillet expects more 
operations of this kind to take 
place in France as large groups 
continue to rationalise and 
rece at re their operations. At the 
same time, LMBOs can provide a 
solution to eventual succession _ . _ 

problems facing on increasing complex LMBOs involving corn- 
number of small and medium- panics with subsidiaries zn sav- 
in France. eral -different countries in coin- 

study by Afif-, , the ing months," Mr Guillet added. 


Montedison profits np 
45% at nine months 


BY ALAN FRIEDMAN M MILAN 

MONTEDISON, the Italian chem- 
icals group which eaxficx this 
week decoded, to' postpone a 
planned LI ,0281m (S837m) rights 
issue because of conditions in 
the equity markets, achieved a 
45 p«- cent rise in its net income 
for the first mne months of 1987, 
to L290bn ($238m\ 

The Affian-based group said its 
sales at the end of the third 
quarter totalled L9,305bn ( 
broadly in line with the first 
nine months of last year. More 


than 50 per cent of revenues 
came from the chemicals divi- 
sion, about 23 per cent from 
energy, less than.. 10 per cent 
from pharmaceuticals and the 
rest from financial services and 
retailing. 

Montedison y e s terday re le ased 
a statament denying any 
involvement in the recent for- 
eign exchange scandal at West 
Germany's Volkswagen. The 
Milan poop was responding to 
reports 


Spanish insurer plans 
Pta4.8bn rights issue 



BY DAVID WHITE MUADMD 

COHPORACION MAPFRE, the 
stock exchange-listed arm of 
SDain’s Mapfre Insurance group, 
to brave the market 
depression - with a Pta4.8bn 
issue at the end of 

The majority shareholder, 
Mapfre Mutnalidad. a motor 
insurer, which has about 60. per 
cent, will guarantee the one-far- 
sht issue. But .Mr tapado Her- 
nando de Larramenm, chairman 
of Corporation; Mapfte.fakl that. 
“things 1 ^duldi nave to.go very 
badly -on the market for Mapfre 
Marti miidad to have to increase 


sumer credit sectors, and the 
lmchiwg of a propert y ana. - 

Total premiums received by 
Mapfre group mm panto* ia Dm 
first 10 months of the year rose 
46 per cent over the same period 
last year, to Pta56.7bn. 

The company said it aimed to 
create a “ bulwark * ajpfttst the 
increasing penetration of the 
Spanish market fay foreign insur- 
es and to h nM up Spate's pres- 
ence in the sector abroad. Fd- 
lowfim-choTeeenvsdtitngnp of ar 
Florida fcab&lierf, it Said ft has ' 
"advanced plans” for invest- 


MUtuauoao to naire ro unease jn Italy an&kMum. 

its shareholding. Subscriptions, • ■ ° 

are due to open on November 29. Corporation Mapfre said ft had 

The group said the move was escaped the effects of the recent 
aimed at financing expansion stock market slide since it had 
abroad, growth in. the rtinsur- “practically no Investments' to 
ance, lira insurance and con- shares. 

Unde expects sales increase 

i GY OUR FINANCIAL STAFF 

UNDE, the West German indue- earnings were likely to be 
trial gas and mechanical engl- "wholly satisfactory" allowing 
neering group, yesterday forecast the company - to pay an 
an Improvement in sales for 1987 unchanged dividend of DM12 per 
despite a decline in turnover share, 
during the first nine months of 

Tiie^ompany said that 1987 
group sales were set to rise by 
about 9 per cent despite a 6-7 per 
cent turnover drop in the first 
nine months. 

According to Mr Hans Mein- 
hard t, the c h a irm a n , full-year 


i group ■ 

DM2.56bn- ($1.54bn)> from 
DM273bn a year earlier, but the 
booking of several large plant 
engineering orders In the fourth 
quarter is expected to boost fall- 
sales to about DM4. Um. Forq 
turnover totalled DM3.9bn. 



Bankers Trust 
International Capital N.V. 

(Incorporated in the Netherlands Antilles) 


(Incorporated ir 

U.S4200, 000,000 

Guaranteed Floating Rate SiAortfirt a lod Notes Dua. 1996 


Fbr file three morths 

13th November, 1987 to 16th February, 1988 
‘ iteolWs 


the Notes will cany an interest rale ol 
and Interest 


per annum and 
Interest 


is per cent 
ie on the relevant 
,1988 will be 


date 1 


payment 

US$1 99.57 per US$10,000 note. 

LWaiVI m ll n n m! Btewste VH 

mmnmufl lmnnvfHr om n-v 
London- Agent Bank 


ua $500,000,000 

0 REflFE 

Red National de los 
Ferrocarriles Espanoles 

Floating Rate Notes, due 1998 

Unconditionally guaranteed by 

The Kingdom of Spain 

In accordance with the provisions of the Notes, notice is 
hereby given that for the six months interest period from 
12th November, 1987 to 12th May. 1988 the Notes will 
cany an Interest Rate of 7Vi6% per annum. 

Interest payable on 12th May, 1988 will amount to 
U.S. S369.69 per U.S. $10,000 Note and U.S. $3,696.90 
per U.S. $100,000 Note. 

Morgan Guaranty Urust Company of New York 

London 

Agent Bank 


Forex chaos 
hits Novo in 
third quarter 

By Our Financial Staff 

NOVO, the Danish biotechnology 
group which specialises in-insu- 
En and enzymes, has shown a 12 
pec cent decline in nine-month 
pre-tax profits to DKr526m 
($82. 7m) and said that the 
upheaval In the foreign 
exchange markets was partly to 
blame. 

Sales-wee 18 per cent higher 
than In the 1980 period at 
DKr3.6bn. Novo said the Danish 
kroner had risen by 8 per cent 
agtest fiie car r t nti M of mam 

ojstoroer countries. : 

However, Novo stressed that' 
the pre-tax result tor the second 
half as a whole was was likely to 
be maintained at last year’s lev- 
els. Ferrosan. the pharmaceutical 
and vitamin company which 
Novo ac quired at file end of last 
year, had increased its turnover 
by 16 per cent in the nine 
months. 


Asea and 
Boveri 
approve 
merger 

By Sara Webb ta Stockholm and 
Jofan Wicks JR Zorich . 

ASEA OF SWEDEN and Brown 
Boveri of Switzerland yesterday 
approved merger of thetc two 
companies. 

Mr Percy Bamevik, Aseas 
managing director and group 
c h ie f executive who will become 
president and chief executive 
officer of the new concern, told 

shareholders at Vaesteraas, 
Area's headquarters, that the 
merger would have several 
advantages including lower pro- 
duction costs, a strongs' position 
S» Europe; North America and 
Asia, and a better use of 
rasources for re s e arch and devel- 
opment. . , 

However, he warned that the 
economic uncstainty of file last 
month - with the stock market 
crashes and fall in the dollar - 
made It difficult to evaluate how 
the heavy electrical engineering 
sector would he affected in 
future, given its depe ndency on 
high levels of investment. 

At their meeting in Wettlngen 
yesterday. Brown Boveri share- 
holders also approved a one-Tor- 
£Lvt 5 rights issue of new bearer 
and registered shares. A similar 
Issue of new participation certifi- 
cates had been dropped earlier 
fifis week following toe shakeout 
on the Swiss bourse. 

The- meeting was told that 
Brown Boveri was unlikely to 
achieve its declared goal of dou- 
bling profits this year. In August, 
Mr Fritz Leutwfler, board chair- 
man, had repeated an earlier 
estimate that earnings should 
reach SFr200m ($l«An) for 
1987, compared with SFr96m 
• AWffltgn fho company wM 
that earnings would still show a 
substantial improvement orer 
1986 results, it explained that 
currency trends and growing 
uncertainty in the markets have 
{minis hed fire pros- 




S! 


p ec ts 

•Jelmoli, the department 
store group, expects to pa* good 
results in 1987 and 1988, Mr 
Carlo Magri, chief exec u ti v e; said 
yesterday. Jelmoli, which 
recorded group net profits of 
SFr34-9m (SSfim^n 1988, did 
not expect the recent tiiakeout 
on wond stock ma ricets to affect 
pre-Christmas sales, he said. 

Mr Magri said JehadS was par- 

Miing pinna pa awnlfia 4 

pony in a related field. 


1 Salinas y Rocha, S.A. 

j. i ■ (locotpora ted Jo. xheJJnhcd Mexican Slates) 

' * 115315:000.000 
Floating Race Notes Due 1988 

In accordance with the terms of the debt restructuring process of 
Salinas y-Rpdia' (the .^Company”) the Company are pleased to 
confirm an interim payment of interest for the period 30, June 1987 
up tp and including 30, September 1987. These funds are now 
m a te ble; The amount payable is $103-33 per U$$5,000 Note. 
CMpon No. 12 b nocto be used for this payment. 

Payment should be daimed from the Paying Agents by production of 
a receipt for fundsthe wording of which can be obtained from any of 
chePa 5 ^Ag«its,Eunpde 2 rorCed«i Each holder must complete a 
receipt. 


November 12, 1 987. London . .. ^ ' 

By: Odbank^NA. (.CSSI Dept). Agent Bank 


CfTIBAtKO 


cuukdum (mures uwteo 

17«I Debentures mi Series 

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. 


Financial Times Thursday November 12 1987 


The new name in 
global corporate finance is 
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Capturing a merger, acquisition or 
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Prudential-Bache Capital Funding 
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This commitment to global 
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permanent financing for, and take an 
equity position in, one of the largest 
corporate divestitures ever — the $1.2 
billion leveraged buyout of the Reliance 
Electric Company from Exxon 


m 


1 














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tlrX 

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24 






CENTRAL 
PARK 
PLACE. I 


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Sponsor Columbus Grde Development Co. The complele offering terms are in an offering plan zrafobte from ibe sponsor 


Mapegaz Holding S.A. 

A new company formed by 
management and employees of 
Mapegaz-Remati S.A. 

has acquired 

Mapegaz-Remati S.A. 


from a subsidiary of 

IMIpic 

L ; A ? >. ?, : ti f: : 


Rnancing provided by 

The Prudential 

Insurance Company of America 
and arranged by its affiliate 

PIC Capital Group 

London. 


September 25, 1987 


Financial Times Thursday November 12 1987 

INTERNATIONAL COMPANIES & FINANCE 


ZECKEND0RF INTRODUCES THE NEWEST 
JEWEL IN 1HE CENTRAL MC SKYLINE. 


ERPM to raise farther finance 


BY JM JONES M JOHANNESBURG 

EAST RAND Proprietary Mines lower-grade ore. 
fERPMT the veteran South. Afri- In the event mining 

can gold producer, plans to raise were affected by grown 


furtlrer finance for Its new shaft problems and 


pro* 

navi 


control 
losses 

development and expansion. have swallowed a significant 
Shareholders are to be asked to portion of the funds intended for 
contribute R90m through a the new shaft Lass-making sec- 
rights issue while the company's tiara of the mine have already 
borrowing powers are to be lifted been dosed to conserve cash and 
to RSOOm from R200m to provide the Intention now is to ac celer- 
bridring finance. ate establishment of the FEV 

In 1985 the mine's geologists shaft and to advance the start of 
located an additional 34m tonnes mining its ore by about eight 


id evaluation has 

shaft system. The new shaft was Indicated an average grade of 7 19 
to have been financed with grams per tonne (g/t) for the 
R200m of state-guaranteed loans FEV ore rather than the 6.84 g/t 
and the proceeds of a R47m estimated in 1985. 
rights issue in 1S35 supple- •Western Pterin ma, the Lon- 
mented by operating profits riio group’s South African platL- 
derived from, the mine’s existing, num - mining subsidiary. 


-increased production and turn* 
over in the year to September 
and has started shaft sinking and 
construction of processing facili- 
ties to increase production by 
about 50 per cent by 1989. 

MiQ throughput increased to 
227m tonnes in the past finan- 
cial year from the previous 
year's 2.09m tonnes. Production 
of platinum group metals and 
gold in matte increased at a 
slightly lesser rate to 8,850kg 
from 8,257kg. 

Turnover rose to R253.6m 
boa R24222n, but the increase 
w» restrained by the land's 
appreciation against the dollar. 
Nevertheless the year's pre-tax 

g roflt was RJ4&Sm against 
118.5m. 

At present, emphasis is being 


which limit produc- 
tion. Hie new shaft and concen- 
trator will allow the mine to 
extract and process an additional 
80,000 tonnes a month of UG2 
reef. Last year capital spending 
absorbed M&lm of the year’s 
R59m post-tax profit. 

aim pal* Platinum, South 
Africa's second largest platinum 
producer, has shelved plaits for a 
RSOOm rights issue to provide 
wvn« of the finance for the corn- 
y’s new R406m Karee mine. 
i*s»* was announced in the 
latter part of October and was to 
have been written by Gencor, 
Impaia’s parent company, it will 
be d efe rre d until stock market 
conditions are deemed more 
appropriate. 


Malbak and FVB post improved results 


BY OUR JOHANNESBURG (XttRESPOMDENT 


TWO BIG industrial holding 
companies in South Africa have 


luced sharply improved earn- 
ings as a result of restructuring 
programmes. 

Malbak, which now embodies 
most of the Gencor group’s 
industrial interests, doubled its 
turnover to R1.96bn (tlbn) in 
the year to August against 
R996m the preceding year, and 
produced pre-tax profits of 
R133.4m against R61.3m. 

All of Gencor 's industrial inter- 
ests, with the exception of 
paper-maker Sap pi, were taken 
Into Malbak in a R9Q0m paper 
deal in September. The transac- 
tion was backdated to June 30 


which has resulted In two 
months’ trading results of the 
new subsidiaries being included 
in Malbak’s annual results. 

Mr Grant Thomas, Malbak 
chairman, estimates that the 
consumer products dlvison 
would have contributed 21.8 per 
cent of operating income had it 
been consolidated for the full 
year. He estimates that the pack- 
aging and paper division would 
have contributed 20.5 per cent 
and that the engineering division 
would have provided 212 per 
cent of the operating income. . 

Net earning? rose to 66.2 ce nts 
a share from 38.6 cents and the 
year's dividend has been 


increased to 20 cents from 15 
cents. Gencor has a 28 per cent 
direct stake in Malbak and con- 
trols a further 64 per cent of 


<FVB) meanwhile completed 
rationalisation programme and 
restored all of its operating sub- 
sidiaries to profits in the half- 
year to September. 

Each of the operating divisions 
increased its contribution to the 
consolidated attributable profit 
and - the directors believe .the 
trend wifi- continue doling the 
second half of the year. 

Interim turnover rose to 


R126bn from R122bn and pre- 
tax profit was R86.6m compared 
' with R48m. 

FVB's principal operating divi- 
sions operate in the pharmaceu- 
tical, building materials, domes- 
tic appliances, retail, auto 
components and food sectors. 
The group is a subsidiary of San- 
i«m, South Africa’s second lar- 
gest insurance company. 

Net earnings rose to 26.7 cents 
a share from 10.9 cents and 
intmlm dividends have been 
resumed with a payment of 65 
cents. Last year’s total earnings 
weer 38.4 cents ami a final divi- 
dend of 8 cents was paid. 


Record HK rights issue 
rejected by investors 


BYKEVM HAMLIN M HONQKDNQ 

THE BIGGEST rights issue ever .corp International, Wardley Cor- 
~ “ por&te Financ e, Sa n Hung Kal 

International CEF Capital 


mounted in Hon 
HKS10.33hn (US$1." 


for 
>y Mr 


Li {Cashing's group of companies, 
ibstantially rejected 


temational, CEF Capital and 
Paribas Asia. Several fund man- 
agement companies had also sub- 
in vestora in the aftermath of scribed heavQy to the issue and 
crash of world stock markets, now face the prospect of seeing 
Hutch- some individual unit, trusts sub- 
Inter- stantially reduced In value.' 
gkong Electric Many analysts blame Mr LTa 
iced that only Insistence on going ahead with 

stock market’s 


has been su 

X 

Cheung Kong 
ison Whampoa, Cave 
national ana Hongk 
yesterday announced that only 
0.1 per cent to 026 per cent of 
the companies’ rights had been 
subscribed to hr the Investing 
public. 

This leaves the underwriters 
and sub-underwriters to digest 
nearly all of the HK$6.1bn which 


continued weakness. They aay 
sen forced 


fond managers have been 
to dump other stocks in order to 
raise the cash to pay far the 
rights they had agreed to take 
up. 

Investors subscribed to 0.1 p er 
cent of Cheung Kong’s HKSzbn 
Issue, to 0.1 per cent of Caven- 
the und erwrite rs’ shares dish's HK$2bn, to 024 per cent 
now worth only some of Hutchison's HK$3.8bn and to 
0.36 per bent of HK Electric's 
HKSSL4bn. 


will not be taken up by Mr Li 
and his companies. Due to the 
ste ep d ecline of the local stock 
market, 
are 

HK$3.7bn. 

The five underwriters are Citi- 


uibvruu kLuuuvci lube w — — ^ r— — 

Subaru group net profits 
down 20% at midway 


FTJJl HEAVY Industries, the 
maker of Subaru brand motor 
vehicles, has reported that its 
unconsolidated net earnings in 
the six months ended last Sep- 
tember 30 dropped 205 per cent 
from a year earlier to Y4.74hn 
C$35m) from YSJMbn. Income 
per-share net fell to Y 12.10 from 
Y 15.64, AP-OJ 'k«porta from 
Tokyo. 

Heavy Industries will pay a Y4 
per share . interim dividend, 
unchanged from the prior-year 
level 

Company executives said the 
sales decline resulted from slug- 
gish overseas demand because of 
the yen’s sustained strength. The 
strong yen has eroded the com- 
petitiveness of Subaru can 
abroad by driving up their 
prices. 


During the 
Heavy uidt 


first half, Fuji 

„ lustries sold 149,000 

motor vehicles in the domestic 
market, up 4.9 per cent from the 
year-earlier level, but exports fell 
10.9 percent to 143,000 units. 

By value, motor-vehicle sales, 
which accounted, for 84-8 per 
cent of its overall business, 
totalled Y265.17bn, down 2.7 per 
cent from a year earier. 

The company predicted that 
sales in the fuU fiscal year wffl 
total Y690bn, down from 
Y716.71bn in the , 
and net eamitus will 
Y8bn from FlOJlbn. 

•OhbayasU, the Japanese 
construction and property group, 
has revised upwa r ds its forecast 
for parent company net profit in 
tiie year ending on Maxcb 31 to 
Y9bn from an earlier estimated 
Y8.9bn, against Y6-29bn a year 
earlier, Renter reports 


Trading by 
Sydney 
broker 
suspended 

By curia Shensefl in SydMf 

A small Sydney stockbrokfaw 
firm was yesterday suspended 
from trading and announced 
that its majority shareholder was 
n^tiatlng to sell its stake. 

The firm is Gresham Securities 
and the shareholder Clarence 
Acceptances, whose securities 
were also suspended from offi- 
cial quotation. 

It was not clear last night 
whether the firm's difficulties 
were directly related to the 
recent worldwide stock market 
collapse, which has affected the 
Australian market more severely 
than other exchanges. 

Mr Keith Russell, Gresham 
chairman, is believed to have 
discussed with, the Stock 
Exchange the firm’s liquidity 
ratio and the level of scrip it has 
been handling. 

Mr Russell is the head of Sim- 
plicity Corporation, which holds 
56 per cent of Clarence Accep- 
tances. Clarence in turn has an 
Si per cent stake in Gresham. 

The exchange gave no reasons 
for the suspension of Gresham. 

CSR in US 
and Canadian 
acquisitions 

By Our Sydney Correspondent 

CSR, THE Australian building 
products, sugar and resources 
group, yesterday announced the 
At 110m (USS74.7m) purchase of 
two building materials compa- 
nies in North America. 

The group said the two pur- 
chases, one in the US and one in 
Canada, represent a further step ' 
in its strategy of establishing a 
substantial oase of overseas 
earnings and of increasing prof- . 
its from new investments In' 
building materials. 

The acquisitions follow closely 
on CSR’s link-up with . Redland 
of the UK In a plasterboard van-: 
ture. 

In the US, CSR bought Krone* 
Aggregates and Its associate,: 
Mack Industries. Krone operates' 
a quarry in Miami supplying 2m' 
tonnes of limestone products a' 
year to Mack and others. 

In Canada^ the .group acquired, 
a majority interest in the Van- 
couver-based Synkoloid Com- 
pany, and has the right to move 
to 100 per cent within three 
years. Synkoloid makes and mar- 
kets materials used in the instal- 
lation of gypsum' plasterboard. 


SELL 

YOUR 

HOUSE 


SOCIETE GENERALE OE BELGIQUE 



GENERALE MAATSCHAPPU VAN BQJ3E 

Public Limited Company 

Incorporated In Brussels h v Renal Decree on 28 August 1822 
Registered Office: 30 rue Roy ale. 1000 Brussels 
Trade Register Number Brussels 17.487 


The Management is pleased to invite shareholders to attend hi the 
company's head office at 30 me Rovale. Brussels, on Tuesday November 
24. 198? at 1 1.30 am the Annual General Meeting, in accordance with 
Article 32 of the Memorandum and Articles of Association, to vote on the 
following agenda: 

AGENDA 

Appointments to be made in accordance 
with the company's statutes 

In order to attend this Annual General Meeting, shareholders must, in 
accordance with Amde 29 paragraph 2 of the Memorandum and Articles 
of Association, deposit their shares by Tuesday November 17. 1987 at the 
latest, either with the company or with Banque Beige Limited. 

R. MORETUS. Secretary R. LAMY. Governor 

Brussels 

November 3. 1987 


Shawmut Corporation 
U.S.$50,000,000 

Floating Rate Subordinated Notes 

Due 1997 

Noticn s hereby gm" Act ihe Role of Interest has been fixed d 7.75% 
and that interest payable on die relevant Interest Payment Date 
February 12, 1988 against Coupon No. 12 in resped of US$1 0,000 
nominal of the Notes wiS be USS1 98.06. 

November J 2, 1987. London “ ~~ 

By Ofegni; NA (CSSl Dept}, Agent Bank 


CITIBANK 


Through the 
Weekend FT 
Properly Pages 

CALL 

801-489 0331 

NOW 


US. $400,000,000 
Queensland Coal Finance Limited 

Guaranteed Floating Rate Notes Due 1996 

Unconditionally and irrevocably guaranteed by 

The Bank of Tokyo, Ltd. 

of which U.S. $306,360,000 is being 
issued as the Initial Tranche 


Interest Rate 

7.55% pa 

Interest Period 

12th November 1987 
12th May 1988 

interest Amount per 
U.S. $10,000 Note due 
12th May 1988 

U.S. S381.G9 


Credit Suisse First Boston Limited 
Agent Bank 


# 

Midland Bank pic 

£254000,000 

Subonfirerted Ftoatlng Rro Notes 2001 

Notice is hereby given foot the Rate of Interest has been fixed ai 
■8'975% fia. and that the interest payable on the relevant 
Interest Payment Dale, February 11, 1988 against Coupon No. 7 
in resped of £5,000 nominal of the Notes will be £112‘B0, and 
in respect of £50,000 nominal of the Notes will be £1,128~01 _ 


November 12, 1967, London 

By: Citibank, N A (CSSl Dept.), Agent Bank QTIBANtO 


y tr 


ft FINANCIAL TIMES SURVEY 

U.K. INDUSTRIAL 
PROSPECTS 

Monday January 4th, .1988 

The FmandafTlmes proposes to publish a Survey on the above. The 
aim of this Survey is to ass ess the pro s p ec ts for a number of key 
Industries in the coming year. The main emphasis will be on the 
U.K. but the International context will be fully explored- Important 
trends affecting each business sector will be analysed and 
described. 

The Svnjr wffl review : 

International and Domestic Economies, Industrial I n ve stme nt, 
Corporate Structure, High Ffiers, Companies to Watch ami 
Industrial Sectors. 

For further Information on advertising please contact : 

Brett Trafford 
Tel: 01-248 5116 

or write to him at: 

Financial Times, Bracken House 
10 Cannon Street, London EC4P 4BY 

FINANCIAL TIMES 

EUROPE'S BUSINESS NEWSPAPER 

LONDON - FRANKFURT - NEW YORK 


FIRST CHICAGO CORPORATION 

US$200,000,000 Floating Rate 
Subordinated Capital Notes Due 1997 
Notice of Rate of Interest 

Floating Rme^lAo^nated Capital Notes due 1997 
(the "Notes'*) issued by First Chicago Corporation for 
the interest period commencing November 12, 1987 and 
ending on February 12, 1988 has been determined to be 
7Vis per cent per annum. The interest payment dale 
for such Interest period is February 12. 1988. Trie Interest 
amount i.e. the amount of interest payabta in respect of 
each US$ 10,000 principal amount of Notes, far such 
interest period is US$ 193.28. 

ChbmicalBanc 

As Agent Bank for 

First Chicago Corporation. 



TOddy nee asset 

value 

I iwctbwI Ciplfl HoUbigs H.V. 

on Wll ms us $238.77 

Listed on the Amsterdam 
' Stock Exc ha nge 
bfooMta: 

Pknon, HcUring &. Pknon NY 
HeKngractn2l4.l0l6BS Aasredm. 
TA+31- 20- 2U188. 


DP Widely net asset 

. Energy value on 6/11 
Resources 

Growth wgs us $33.48 
Fund 

Listed on the 
Amsterdam 
Stock Exchange 




I nfo r mati on: • 

Renoft. Hddrtng& Pterion NY 
Herengrarhr 2H, 

KH6BS Aia n en fam . 

HL+ 31-20-20188. 


U5.S100, 000,000 

rw 
▼ - 

Den Danske Bank 

af 1871 Aktfesebfcah 

fl MAMp ormm u in *w tOnodotn at 
Dunm** wt& tebtoy} ■ 

' Pqrpaliial SubonfttsM 
Floating RMaNotos 

In ncoot da nra «Mt« Mw previsions of 
Sto Notns. notes is hareby gtvon ttwl 
lor ttw InHrast Psriod tram NovonSwr 
12 . 1B87I0 Msy 12.19B8.awNomw« 
cany an Wares! Rata of 7W*. par 
annum. The Inu re* payable against 
Cmpon Nol 7 on 1h» ratavsnt tntsrest 
pgymartt dtere Usy 12,.1988'wU bs 
US. $388.66. 

Br; Tto CUSS* MwMtBf 
- London. Agent Bank 
November 12. 1987 


.NA 

O 


Wells Fargo . 

' ■ & Company 

U.S. $200,000,000 

Floating Rate 
Subordinated Capital 
Notes due 19% 

In accordance with the 
provisions of the Notes, notice 
is hereby given that for the 
Interest period 
12lh November. 1987 to 
I6lh February. 1988 
the Notes will cany an Interest 
Rale of 7Vi% per annum. 

Interest payable on the rctevam 
interest payment date 
Ifeth February. 1988 will amount 
to US£U).(» perUSS J0.UU0 
Note. 

Agent Bank: 

Morgut Guaranty Trust 
r of New York 
indan 


r 


0 


The Export-ln^port Bank of Korea 

US$10CMXXM)00 

Floating Rate Notes Due 1995 

In accordance with the provisions of the Flo&lng Rale 
Notes, notice is hereby given as follows: 

Interest Period : 12th November, 1987 to 
12th Msy, 1988 

Rate of Interest : 7-tfc % p*. 

Coupon Amount us$ 38X65 (per note of US$10,000) 
USS 19,4X129 (per note of 
US$500,000) 




Agent 


LTCB Asia Limited 


USX T 00,000,000 

FLOATING RATE DEPOSITARY RECEIPTS DUE 1997 
issued by The Law Debenture Trust Corporation pic evidencing 

entitlement to payment of principal arid interest on deposits with 


Banca Nazionale del Lavoro 

OacarpanudgtaHZsaaaodiQwdmdiDiriuPuUBumtheRapmUktfJt^y) 

London Branch 

Notice is herebygrven that the Rota of Interest for Coupon No! 1 tthas 
been fixed at 7-625% pa and that the Interest payable on the relevant 
Interest PAtmiitnt lMt». Pahman# 19 1009 i ipmh /win 

nominal — 

US$250,000 nominal 


-- — 1™”"“ .•■atwiviiiuneHBavaoHBninvTVWvviu 

Payment Date, February 12. 1988 inTespact of USSIO^OO 
I of the Receipt will too US$1 94^6 and in respect of 
,000 nominal of the Receipts will be US$<871.S3. 


November 12, 1087, London m m 

By: Citibank. N A (CSSl Dept}. Agent Bank C#7/B4mO 






Financial Times Thursday November 12 1987 


25 


INTERNATIONAL CAPITAL MARKETS 


Non-dollar prices ease 
in thin day’s 



BY CLARE PEARSON . 

PRICES OF non-dollar Euro- 
bonds eased yesterday in the 
face of stronger European equity- 
markets and concerns that the 
dollar might have bottomed out. 

But the closure of the . US debt 
markets for Veterans 
trading volume thin, 
were especially reluctant to take 
up positions ahead of the release 
today of US trade figures for 
September. 

These are expected to provide 
a crucial test of the dollar's resil- 
ience at current, levels. Some 
dealers said yesterday that, if the 
trade gap emerged at Sl&bn or 
above, the dollar would probably 
be sold. August’s figure was 
Jl5.7bn. 

Eurodollar bond prices yester- 
day nudged about ft percentage 
point better where changed. 

Prices of Euroyen bonds suf- 
fered sharp falls of up to % 
points, though the price of 
benchmark No S~ 


further cut In UK bank base 
lending rates in the near-term. 
Prices in the domestic market 


88 Ja; 

eminent bond proved fair! 


gov- 

resil- 


ient in London "trading. 

Dealers said the falls in the 
Euroyen sector had been trig- 
gered by large retail sell orders. 
Until yesterday, lack of supply in 
the Euroyen market had kept 
prices stable. 

Investors in Eurosterling bonds 
also took profits, sending prices 
down by as much as. 14% points in 
the 10-year area. Price falls were 
triggered by a bounce in the UK 
equity market, dulling hopes of a 


by up- to . 1 point at the 
long end. In response to Improv- 
ing sentiment about the do l lar 
and slight rises in West German 
share prices. Shorter maturity 
bonds fell by about ft point. 
Euro D-Mark bonds lost about ft 


INTERNATIONAL 

BONDS 


lint on average, with longer- 
ited bonds losing ft point. 

The Bundesbank replaced 
DM11.8bn in the market, DM2bn 
less than the amount it is drain- 
ing this week. Dealers inter- 
preted this favourably, as a sign 
that the Bundesbank wished to 
be seen to be intent on keeping 
interest rates down. However, it 
had no impact on bond prices 
yesterday. 

A recent DM200m 6 per cent 
seven-year bond for BFCE 
closed at 98ft -bid, compared 
with a par issue price. On Tues- 
day it had closed at 98.60 bid. 

The Japanese equity warrants 
market had another volatile day, 
with prices rising -sharply to 
reverse Tuesday’s falls, even 
though the Tokyo stock market 
closed lower. ...... 

. Dealers said the spate of buy- 
ing by short-term trading 
accounts had been triggered by 
last hour gains in blue chip 


stocks In Tokyo. The warrant 
market was expected to trade 
lower today as yesterday's gains 
had discounted a rise of as much 
as 800 points In the NQckei-Dow 
Jones index. The price of a war- 
rant for Nomura Securities 
closed at a mid-price of 27ft, 
having opened at 13. 

In Switzerland, prices of 
fixed-rate bonds ended the day 
mixed in moderate trading. 
There was some concern that 
investors were returning to equi- 
ties, although dealers said there 
was still a firm undertone to the 
bond market. 

Dealers said that some long- 
dated issues were still in strong 
demand. For instance, the 11- 
year tranche of a bond for Oea- 
teraelckLsdte ElektrLdtaets 
rose to 104 yesterday, up 1ft 
points on the day. 

But a recent SFrlfiQm 5ft per 
cent seven-year par-priced issue 
for Kyushn Electric Power, 
which closed its first day's trad- 
ing on Monday at 102, the 
day 1 point lower at 101. 

Yamaichi International 
(Europe) announced a Y20bn 
five-year floating-rate issue for 
Hokkaido Electric Power, 
designed for placement with Far 
Eastern investors. The bond pays 
interest semi-annually at a rate 
of 55 baas points below the Jap- 
anese long-term prime rate. It is 
priced at 10030 and is callable 
after two years. 


Shearson to lead Sweden’s CP 


BY OUR EUROMARKETS STAFF 

SWEDEN YESTERDAY said it 
had appointed Shearson Lehman 
Brothers Internationa! as arran- 
ger for a Eurocommercial paper 
programme under which it will 
issue between S750m and 82bn. 

The announcement marks an 
abandonment by the Kingdom of 
the tender panel approach for an 
existing note Issuance facility, 
signed m 1984 with an original 
eOstrong panel, though this had 
already Men adjusted as Sweden 
sought bids directly from banks. 
It has been one of the most 


active issuers in the short-term 
Euromarkets, with outstanding 
of Slbn over the past year. 

The programme will have four 
dealers in addition to Shearson: 
Citicorp Investment Bank, Credit 
Suisse First Boston, Goldman 
Sachs International, and Merrill 
Lynch Capital Markets. 

An official at the Swedish 
National Debt Office said yester- 
day: ‘We felt it was beneficial to 
scale down the number of deal- 
ers in the paper to gain greater 
control of where It was being 


specially In view of 
Dlatlllty in Interest 


placed, es; 
recent vo. 
rates.” 

The Kingdom has been elicit- 
ing bids for paper issued under 
the facility directly from banks 
for the last 18 months. The offi- 
cial said this h«d enabled it to 
weed out the best performing 
dealers. Shearson said Sweden 
has achieved rates of 30 basis 
ts below London interbank 
rate over the last three 
weds. It will continue to issue 
paper in the US domestic market 
under its S2bn programme. 


poin 

bid 


FT INTERNATIONAL BOND SERVICE 


Listed are the latest International bonds for wtadi there is an adequate acamtan marltsL 

OSMtUI 
STRAIGHTS 


Cterfng prices on November U 


Abtey Hoimil 7igj 92— - 

AH Nippon Air 9% <37 

American Brink 8% 92- 
»7%93_ 


A/S EksportfimueTti 92- 
Betgmni ^ 92. 

British Telecom 7% I 
British Telecom 8% ‘ 
Connta9%- 
CanwBMPacU 
C.CX.E 7ifl 9L- 
C.N-CA 7 \ 91. 
Coca-Cob Em. 8% 90. 

GreUt Ljonnah 991 

Credfe National 75, 92— 
Cud* Nation* 7% 9L. 
Deflimrii 7%92_ 

Dmurii 8%9L 
E.EX74L 
E.E.C.7L92L 
E.ELC 8%96- 


E.I.B.7V 
E.I.B.9%97^. 
Finland 7>j 97_ 
Finland 7k 93. 


Ford Motor Dad Ilk 
Gen Elec Credit Uk I 

G.NULC.889 

fl.MAC.8k 89 

House* 8k 97 

Hondi 73*92— 
HoocH 7k 


iB9L 


IveA |R Sflar Aa wmR VBiN 

200 92% 93%+0%+4% 939 
100 931, 94 +0% +0% 10.41 

150 97k 97% ♦0k ♦Ok 934 
.100 91% 92% +4% +1% 9.40 

150 98% 94k +0% +1% 9.01 
■400 99k 100k +0%+0% 905 
250 87 87%«a%«8% *84 

150 197-9719 0+1% 9.43 

1000 97k 98%+C% *1 938 
100 fl04% 105k ♦Ok +0% 933 
113 94 94k +0% *0% an 

150 93% 93% fl+ck 921 
100 98k 99 +0% 0 8-78 

200 99% 100k +0k +0k 8-97 

100 93% 94k+0k+«k *05 

150 94 94k 0 +0% 8.98 

500 92k 92%+0%+lk 939 
300 97k 98 -0k +1 &97 

100 93% 94% +0% +0% 8.78 

250 91% 92%+Ok+Ok 927 
100 *2 9Z%+0%+I% *60 

100 92k 93 0+lk 922 

150 9B 98k 0+2% 985 

200 889* 88% +8% +1% 9.79 
200 92 92k 0+1% 927 

100 104% 105% +0% +04 8-73 
200 102 102k 0 +0*8 991 

250 98% 99% +0% +0k 880 

200 99% 99% -0% 0 853 

100 167k 88 0+1% 1034 

100 f94% 95% 0 +0% .*78 

.300 109% 90k 0 +0% 10 l08 

150 92 92%+0k+0k 938 

100 95k 98+0%+Ok 937 

1028 


YEN SntMNTS kmt§ 




20 

KamJ Electric 

£0 





day wok VhH 

-®k-o k Ml 


99% 95% __ _ 

95% 98% -0% -0% 537 
96% 99% -0% +Wj " 




1 5k 92- 


.(hi day -0k on week -in* 


531 
531 
O 538 
53S 
5ja 
534 


0TREB STRAKKT5 

Aegon 5% 91 FI 

Angpa8k 89 FL 


1 8 % 91 FI 

Alg. Bk-Nfd. 5%91 f 
Afe.Bk.IM. 7% 89 1 
AfeBk. Ned- 8 89 FI 


100 98% 98% 0+0% 

100 10Z%103k+Ok 0 


833 

815 


EhaMsOCJOl 
im<«A» 


BP Capital 


14% 90. 
Dtnnmrlc 7% 92 ECU 


DG Fla. Ca 13% 90 At.. 
06 Hn.Cn. 14 90 AS_ 
06 FBanee I4%9Z AS~ 
DenHGlia Bank 9% 97 S_ 


BU4k92Aa. 
rft03%9lAfl. 
Electrolux B 89 FL— __ 
ELS 8% 93 LF_ 


i’ 7% 97 ECU. 
EMNmUkl 


Earofiaa 7%92 FL 


LXC-Baf Jagul 97 200 88k 87% 0 +11026 

Merab-Bent Crcd 8k 92— . 100 98k 96% +«, +0k 843 

MkuOritf On. 7% 93 — 100 90k 90% +Ok +«% 9.99 

Mutual America 7% 92 100 +93 93% 0 *C% 938 

Norway 7k 91 500 94% 95k J»+°k 

PepsiCo Inc 7% 93 200 91% 9Z% +0% +0% 931 


10km FL 
891 FL 


FomlHr4hndA3% 9IA5 

fiJMJLC. 992 £ 

GJMJIXL9k 92CE. 


_ 105% +0% 

100 100% 100% . 0- 
100 98 98%-0%+Ok 627 

150 102% 103% 0 O 809 

200 lfit% 10Z%-0% O 805 
40 197% 98k -0% +0% 1002 
75 197k 97% 0+2% 14.48 

80 197% 98 0+2% 1532 

100 99% 99%-0%-m, 708 
.SOtMOk Ml 0 +2% 1341 

79 199k 100% 0+2% 1307 

SOfSnk tie 0 +2% 13.79 

75 98% 99% — 1% — 1 3000 

100 190k 98% 0 +2% 1437 

100 197k 9Bk 0+2% 14*4 
60 102 102% 0 0 825 

1000 102k 103k -0k -Ok 7.95 
MS 90 S3%-0k+0k &45 
150 102% W3% +0% +0% 005 
50 KB 103% 0 0 832 

50 llSk 105k 0 0 838 

100 98% 99%-0k+0k 832 

75 t9S% 97% 0 ?% 1483 

9 AO 


Prudential 0* 8% 94 125 95% 96% -C% + 

damn Airway* 10% 95 140 10Z% 102% -0% 

Saab Scarf! 9% 91 125 100% 100% +0% 


SMhatdwww X0%« 
State BkS Aw 9k 93- 
SwedM E*pLCnl7k 91 
Swed Exp Cr*d 10 92— 

Sweden 7 9L — 

Sweden 7 92 

Sweden S% 9S_ 

Sweden 8% 92.. 


200 104^ 105% +0% - 


Tatyo Finance 7% 94. 
Toyota MtrCred.7% 9 
Victorian Rep 11% 92 
World Bank 7 92—. 
World Bank 9 97_ 


930 
9.90 
929 
*22 

100 98 98% -Ok +0% 9.70 

100 94% 94% -0% +1 E90 
100 103% 104% +0% +1% 8.90 
250 94% 94%-0%+0% *73 
250 93% *3% 0+0% 888 

200 94%. 95k 0*1% 933 

200 98% 98%-0%+lk 8-92 

100 B9% 90% +0% +0% 1030 

150 92% 93%+0%+O% *22 

150 107% MB-0%+1%. 934 
300 193% 94+0%+Ok 882 

300 95% 95% -Ok +1% 9.70 
100 93% 94% 0+0k 989 


EM AX Au*JTnJ490AJ 

HaflfauBS 10% 97 2 

Hriaba Fin. 13V96AJ 

Inp Own Intis 10 03 L— 
tofJi IndJnii 1093E. 


VasudaTrwsi.nn8ii .-___ ... - . - - 

Avenge price dtangb. On dv+0% on week +0% 

DEUTSCHE MANX 
STSAHHTS 
Arab Baaklng 5% 92_ 

AWs Flu-SVS 5% 


Bask ol Greece 6% 95- 
Bank ol Tokyo 5% 93. 
Central BK. Tnrioey 


7 92- 


Degussa Int- 8% 97- 

E.I.B 5% 9ft. — 

E.I.B6 97 

E-I.B. 6% 96 

E.13.6%97 

E.I.B.6% 95_ 


M Oder day week YWd 

150 197 97% 0+0% 819 

200 199 99% 0 *1 687 

150 197 97% +0% 0 6.97 

100 1101% 101% -Ok -0% 5.44 
200 T100% ItU 0 +Ok 681 
200 19^ 95%+0^+lk 6.75 


Lad SecuridM 9% 07E——. 

Leeds B8 10% 91 

KHLBhJDeHwfc 6 91 FI 

Hat AuRralta 14 92 AS_. 

NaUdBwMaBSin.93 
New Zealand 7% 93 
OtstersXHdLlSk 94 
Prudeotiai Ffa.9%07 
Bmal Tnotco 10% 9t 
£3S»yJ10%93C. 
S.tkR.7%951 
Tstbense Force 11% 4 
Umbm 7k 90 Ft— 

Wessaneo 6% 90 FL_ 

World Bank Ilk 95 1 
Worid Bank 13% 92 i 

FUMUM RATE 


50 97% 9B* -Ik -0% 980 
73 95% 95% -<J% -0% SLW 
SO 196% 97% 0+2% 1M1 

100 100% 100% -1% -0% 1025 
75 197% • 9B 0+2% 1382 
100 98k 96% -l%+0% 1018 
60 108k 100% -1% -Ok 985 
200 t89k 09% -1% +0% 1080 
50 1101% 101% -0% 0 987 

150 98% 98% —Ok +0% 6A3 

50 195% 98% 0+2% 0l99 

75 tlCU 101% -0% +0% 9.79 
ECU- 200 95k 95% —Ok — 0% 


75 197% 98% 0+2% 1409 

150 91% 91% -1% +0% 10.41 

75 MOk !M%-0% -0% 1U1 
60 tM4 104% -0% +0% 9J7 
90 95% 96% -Ok -0% 832 
90 102% 102% -0% -0% 9.78 
50 101% 102% 0 +0% 683 

50 im%.101%-0%+0k 836 
100 108% 108% -1% +0% 958 
-UO 198% 97% 0 +2% . 


Alberta 393. 


AHance & Lde8id 94 1 
Brighou 9L 


EiuoXnatfl Steel 5% 97- 

Enroll me 8% 98 

Elec Dr France 5% 97 — 

Hooch lnrtfln.7 95 

IJLD8. 697_ 

IBJ 5k 92. 


150 

300 197% 

300 rw% 

400 197% 

300 tiro 
175 148 96% 

100 199% 100 
300 


+lk 6.40 
-Ok +1 829 
-C% +0% 633 
H-Ok+0% 884 
103%-Ok+Ok 


ioo mm 2IS 


Japan Finance 5% 97- 

ireiand 6%97 

Korea Dev BK 8% 93- 
Matajsta 6 -k 94 — 
0eser&.Kaat.BK5k 9< 
Portagl 5% 92— 
Portugal (A*95_— 
Royal Insurance 5% 92 
StatoH bk 97. 


Soe Cent Nuclear 7% 95- 
Steweag 5% 48. 


Tokyo Elec. Power 6 97 „ 
Worid UC. 6% 97- 


Averagc price 


SWISS FRANC 
STRAIGHTS 


834 

0+0% 682 
0+1% 828 
0 +1 857 

o+ik an 

__ 200 195% 98 -0% +0% kbl 

— 1001100% im%+0%+0% 537 

_ .100 193*7 44 +0%+l% 887 • 

— 300 198 98%-0k+O% 625 

— 100 149% 49% +0% *Ok 875 

__ ISO T97% 97% +0% +0% 872 

— 200 tUl 101% 0+1% 533 

— 150 199 95* -Ok +0% 893 

— 150 1100% 100% +«% +0% 851 

— 300 149% 100k O+Ok 589 

— 200 195% 48 +0% +1% 827 

_ 150 1102% 102% +0% +0% 881 

— 100 193k 93% +OEa+lk 6Jtt 

_ 300 *144 44% 0 0 885 

600 199% 1MJ* rCk +1% 627 
On day Odd weak +0% 


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Smaraw UHmaa H«s 9L— — 

Unted lOnykna 5 9 3- 

wnocbldt Fin. Sk 47 

WMivridi 5 95 £. 



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AMRCflma.Sk 
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100 196k 97k+?k+g 807 


02- 


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BBL WIW/2%97. 
ElecDtFraeice507_ 

E.I8- 4% 97 

E.124%97 — _ — 
- EnssGwaeit 599 — 
; lrelapd502 


i+S*' _ 

200 188% 90 +1% +0% 848 

_ 150 194 95 0 0 555 

- ZSO 192 93 0 >5 304 

_ 100 181 Uk 0-4% 529 

_ 100 196% 98% 0+0% 501 

_ 200 197 97k-Ck+0% 515 

- 200 197k 

_ 100 147 98 0-0% 529 

- 1» 141% 92+0% -0% 525 

. Nmtomdbod5%02 1» tJM 100% -0%^ -U. 5^ 

. miwPrtt fr 4? — 75 *197 97% 0-1% 875 

w tw, W*. o*;>. 

■ 100 148% 98k -0% -a. sa 

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r WmM 8 * 5 fff ... 206 «*% 95-ffli+Ik 533 

j Amra^ price dtapae- 0 ° d* +°k M •••* 0 


Fail Hvy tattoo 8*85 878 

Fujitsu 3 99 - 5/84 1106. 1 

flmni Barit 2% 02 — 4/87 808. 1 

MCA INC 5% 02 U3. 19S76922 

Waalu Camara 2k 94IHL_— 1^861004. I 

mtj*itnst 2 vra ion8i«a 

Heat PLC 5% 03 a 11/87 43 99k 101% 

MnpM Elec 2% F 


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Sri2 -99.92 100X2 11/12 7M 
M 9924 9929 23/m 1027 

O 100X2 10QJ2 19/02 7JL9 

5 99X2 99X7 8AJ1 1037 

9*12 9937 22/02 729 

lOk 9630 9875 3OT1 7J2 
101 9825 9B35 13/01 7k 

10 100X7 10 12 22/02 431 
2 9934 9939 8/02 897 
2 9838 9856 11711 1055 

S ' 9936' 998130712 1037 
9924 9934 IB/11 10k 
0 9877 4827 4412 7k 

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0 .10027 10023 7/01 829 
0 9*08 992828/01 7M 
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4R/‘ 

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8/87 82. 88 90 .-12984 

17/882825 78 . 78 0 47X0 

WT 5*7 98% 98 -2% 27 JBS 

14/87 6825 v 62 64 - 0 5432 

4/87 967. 108% 109% +1-121 

tszm 4306 128% 129% -8-4J2 
4/87 200. 91% 93% -Ok 11X1 
11787 7903 174 178 0 569 

12M +0%-722 

173 +Uk -184 
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32^ 

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1/851295.264% 265% +18-129 
urn 805. 182% 184% + 8 % -0X4 
. 4W3310L 135% 137% +8%-122 
1/87 58 82% 84*2 
UM810Q4. 149k 151k -Z%-L» 
4/874222 73 77 -0% -3840 

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p ma d a m eMhe can au tefl e di ae price nfacgairinB shares vtatheboad 

over ©■ Dost new price eftte Am. 



Merc guru 
jumps to 
defence of 
futures 

By Ataraidar Nteofl, 
Emomariwla EdBor 

THE CHICAGO Mercantile 
Exchange swung into Lon- 
don yesterday- gnus blazing 
in defence or the role of 
fntnrea markets In tke 
stock market crash. 

Ur Leo Melamed,- often 
acknowledged as the Ugh 
priest of financial futures 
markets, stepped up one 
rang when he was Intro* 
dneed as "God* to an admir- 
ing crowd attending a lav- 
ish symposium put on by 
the exchange. Though nei- 
ther chairman nor presi- 
dent, he commands the 
exchange from his position 
as chairman of the execu- 
tive committee. 

"Fundamentals wfll oat,” 
Mr Melamed boomed. “If 
hnmans ignore fundamen- 
tals for too long a period of 
time, they win be aony.* 

Arguing that economics 
and not market inadequa- 
cies caused the crash, Mr 
Melamed has ' a battle on Ms 
hands. As he put it, US leg- 
hdators are very much influ- 
enced by public percep- 
tions. Public perceptions 
have it that trading strate- 
gies involv i ng fhtnres con- 
tributed i m port a ntly to the 
crash. 

Consequently, there is a 
swen of opinion that regula- 
tion should be tighter, mar- 
gins raised, and other ms 
a ares taken that weald 
cramp the free-wheeling 
fihBvigu style. He is oat to 
correct those perceptions 
before they become too 
fixed. 

“Programme trading,” he 


the culprit of the faU.of the 
US storit market." Far front 
it, arbitrage was not really 
possible. Trading could not 
be conducted properly In 
the stock market because of 
Imbalances of orders. 
Indeed the CME - which 
trades the Standard A 
Poor's BOO Index futures 
used In most programmed 
arbitrage - was the “only 
market In op4tratlon...we 
were the only place that 
could take the hit." 

But hadn’t many traders 
in the pit stopped trading, 
reducing liquidity? No, Mr 
Melamed told Journalists, 
that was wrong. The Merc’s' 
had luftii- 

died it very well, although 
naturally there had been 
Money lost and some seats 
sold. The Chicago Board 
Options Exchange, howev er. 
was another exchange and 
another matter. Options 
positions were large and 
complex, and if you were 
wrong lx was no simple But- 
ter. “A futures trader is 
either In or oat. It's a sim- 
ple process to get out.” 

Later, Mr Melamed let 
slip that *he trading e om * 
inanity in the SAP pit had 
diminished by SO per cent. . 
Bat the pit was over- 
crowded anyway. The 
departures merely left 
behind the larger, better 
capitalised market makers 
who were able to provide 
liquidity. Mr Melamed also 
said that volume in the SAP 
pit has since the crash been 
.at SO par cent less 
normal . 

volumes. 

But didn't eompater-genr 
erated futures selling 
orders^ because they all 
came at once, make prices 
frill faster? -No, that wasn’t 
trae either. In any ease, 
when sell orders come “you 
cannot produce buyers by 
rule of law or anything 
else— Bayers step forward 
when theythinlrthe price is 
right." . . 

And what about the sup- 
posed rift between the New 
York Stock Exchange and 
the Merc, with NYSE chalr- 
i Mr Jo 


‘ohm Phelan casting 
aspersions on stock Index 
futures? Well, the press had 
that wrong too. There was 
no major disagreement 
between the two exchanges. 

More than that, Iff Jack 
Sandner, the CME chair- 
man, staunchly defended 
the right of the Commodity 
Futures Trading Commls- 
slon to regulate fa tares - 
countering current sugges- 
tions that the Securities 
and Exchange Commission 
should take over. The CFTC 
had performed “extraordi- 
nrlly well," he said, omit- 
ting to mention the bitter 
battles' which futures 
exchanges have fought • and 
«waalially won - with the 
CFTC over the past few 
years. 


Fundamentals remain strong for ADRs, reports Stephen Fidler 

Gould applauds markets’ survival 


THE .COLLAPSE of share prices 
lost month has encouraged a sea 
change in attitudes to markets, 
Mr Bryan Gould, the Labour 
Party's spokesman on trade and 
industry told a Financial Times 
conference yesterday. 

Mr Gould, addressing a confer- 
ence on the prospects for the 
business in. American Depositary 
Receipts organised In association 
with tife Nasdaq of the US, said 
the crash had made it dear that 
the devotion of government pol- 
icy to satisfying the financial 
markets had been “a .sort of 
short- termism." 

A future Labour government 
‘would want to see these mar- 
kets operating as professionally 
as possible’ but would not let the 
markets stand in the way of lon- 
ger-term objectives for the real 
economy. 

Of the crash, he said "It has to 
be conceded that the London 
market has survived Increasingly 
well We haven't lost any market 
makers in equities.” However, 
the problem may not yet be over. 

Mr Junes Xtavin, managing 
director at First Boston in New 
York, said the reasons which 
encouraged US investors to buy 
foreign shares such as ADRs 
existed just as much after as 
before the crash - investment 


Nasdaq accounted for 75 per 
cent of all ADR listings. In the 
first nine months of 1987, 1.6bn 
Nasdaq-listed ADRs had been 
traded, compared with 512m. for 


FT 

CconferenctT) 

The prospects 
for the 

ADR Business 


IWdiVi i 

daq ns 
eraily i 


tion and div 
rencies and companies. 


in cur- 


the New York Stock Exchange 
and 60m for the Amex. 

Mr John Wall, Nasdaq execu- 
tive vice president, said ADRs 
accounted for 10 per cent of Nas- 
daq volume, and the average 
number of market makers in 
ADRs for UK companies aver- 
15. But the perception of 
as just a small investor;;' 
market was false About 41 per 
cent of its volume this year was 


accounted for by large block 
trades, compared with 52.6 per 
cent for the NYSE. 

He outlined a proposed link of 
Nasdaq with London's Seaq sys- 
tem, and with the Singapore 
exchange Mr Charles Syming- 
ton, managing director of S G 
Warburg in New York, said list- 
ings could be made on the New 
York or American Stock 
Exchanges, or on the ‘pink 
sheet” segment of the 
over-the-counter market, the 
basic Nasdaq market or the Nas- 
national market system, gen- 
‘ used by huger companies. 

About 13,000 US and foreign 
securities trade on the pink sheet 
market, named after the pages 
on which price information is 
distributed to dealers. Its disad- 
vantage is that it is less liquid 
than the other markets, though 
it avoids time-consuming and 
expensive Clings with the Secu- 
rities and Exchange Commission. 

Mr Ralph Marinello, vice 
president of the ADR department 
of Irving Trust, a depositary for 
the underlying shares from 
which the' ADRs are created, esti- 
mated that unsponsored ADRs 
accounted for 82 per cent of the 
market in 1982. That percentage 
has since dropped to about 70 
per cent. 


Mr Joseph Velli, vice presi- 
dent at the Bank of New York, 
said a depositary’s role was 
threefold - to report back to the 
company on the trading of its 
ADRs, to act as transfer and reg- 
istration agent, and to clear ADR 
trades for brokers, ensuring they 
did not incur unnecessary costs. 

Mr Chris Prfor-Wfllenrd, a 
senior manager in UK equities at 
the London stock exchange, 
detailed trading of ADRs on the 
London exchange. Fourteen UR 
ADRs are traded on Seaq by 
seven market makers, a figure he 
predicted would increase in com- 
ing months. 

Mr Bowen, a Klein- 

wort Benson director delivering 
a speech for colleague Mr Jef- 
frey Green, said it was too early 
to judge whether, as had been 
suggested, companies with ADR 
flotations in the US had suffered 
flowback as a result or US Inves- 
tors selling in the stock market 
crash. 

Mr Robert Mangone, a part- 
ner of Townley ana Updike, the 
New York law Arm, addressed 
the conference on the technical 
and legal implications of creat- 
ing ADRs and Mr John Huber 
of the law firm Latham and Wat- 
kins, on the regulation of the 
ADR market. 


Mexican lifeboat for brokers 


BY DAVID GARDNER M MEXICO CITY 


MEXICO’S FINANCIAL authori- 
ties, in conjunction with the 
leading local stockbroking 
houses, are putting together a 
lifeboat for smaller orokers 
which have been hit by the stock 
market crash of the last five 
weeks. 

The new liquidity available to 
broking firms will be worth at 
least ijlOObn pesos (SSOOro). 

National Finandera (Naftnsa), 
the state development bank, is to 
provide credit lines worth 500m 
for investment in stocks 
mutual funds, while the 
six leading brokerage houses 
have pledged to match this peso 
for peso. 

The complex mechanism 
envisaged for paying back the 
new credit is also intended to 
provide a measure of stability to 
a bourse renowned for its volatil- 
ity even before the recent world- 
wide shakeout 

A veteran of similar boom-to- 
bust cycles in 1979 and 1984, the 


small but fast growing Mexico 
City market rose 329 per cent in 
dollar terras in the nine months 
to the end of September - far 
higher than any other market in 
the worid - before seeing 60 per 
cent, or $20bn, wiped off share 
values. 

As one of its consequences, the 
rise produced what one senior 
finance official described pri- 
vately last week as "the gro- 
tesque over-valuation* of finan- 
cial stocks In general and 
brokerage firms in particular, 
many of which were then 
engaged in headlong expansion. 

For example Operadora de 
Bo Isa, the leading house, was 
valued at the end of September 
at $2L3bn - more than, say, Mor- 
gan Stanley - and had opened 
around 40 new branches. Three 
other brokerages, all of them like 
Operadora, contributors to the 
new lifeboat, were valued at over 
Slbn. 


been hit hartffiy the crash, and 
there were fears that some of the 
smaller, more flamboyant new 
entries to the market nught faiL 

Market analysts point out that 
there were some 800m pesos 
(S486m) in leveraged stock pur- 
chases still unsettled last week. 

The new credit lines should 
amply cover this. Although small 
In relation to last month's losses, 
the S600m target is a large sum 
in relation to the ‘float* of trade- 
able shares in the market. This is 
about a quarter of all shares, 
which now have a total valua- 
tion of Sl4bn. 

Amortisation of the credit will 
be either through delivering the 
mutual fund stock bought with it 
to Nasinsa or, when the index 
rises 26 per cent more than infla- 
tion, in cash. The idea appears to 
be that the cash will be raised by 
selling the stock, which will help 
correct the Index. 


Bank capital 

discussion 

postponed 

By David LasceBris 

CENTRAL BANKERS of the 
world's leading industrial coun- 
tries have been forced to post- 
pone until December the consid- 
eration of a new international 
accord on bank capital. 

The matter was scheduled for 
discussion at Monday's meeting 
of the Group of 10 central bank- 
ers in Basle, but got edged out by 
more urgent issues to do with 
the crisis in the financial mar- 
kets. It will now be considered 
on December 7. 

Staff of the Cooke Committee 
on international banking super- 
vision have prepared a set of 
recommendations. These would 
expand the original year-old 
accord between the UK and the 
US to permit many other coun- 
tries to use the same definition 
and measures of capital. 


ADRs through The Bank of 
WewYbrit can move y ou closer to 
American investors. 



When itfstimeto 
turn to the US. markets to 
increase your company’s 
equity capital or expand 
your existing shareholder 
base, let an American 
Depositary Receipt pro- 
gram through The Bank of 
Newark help you reach 
American investors. 

With The Bank of 
New%rk you have the 
security of knowing that 
your ADR facility is being 
handled by a leading stock transfer bank and one of the largest US. securities processors. That 
translates into state-of-the-art computer and record-keeping systems and the effective manage- 
ment of shareholder relations. Vfe can even act as your exchange and tender agent if you are involved 
in a merger or acquisition. 

But technology is only one of the reasons that non-US. companies rely on The Bank of New 
York to act as depositary for their ADR programs. Flexibility innovation, and personal attention are 
the others. 

Wfe can tailor our sophisticated operations to meet your company’s individual needs. Wfe main- 
tain a specialized ADR department, and a dedicated staff with the experience rnrrn 
to consult with you on all aspects of your ADR program. 1 flCi 

Pbr more information on how our ADR services can help you reach T) AT? 

American investors, call Mr. Fred Graef in London at (01)626-2555 or JJTii llvv^L’ 

Mr. Jbseph \felli in New Y)rk at (212) 530-232L 


esanteBukflrKtwRat Ulster roc 


NEW 

YORK 


t 






Financial Times Thursdav November 12 1987 


PASSENGER LOAD FACTOR AT 82% IN AUGUST 


British Airways up 65% to £232m 


UK COMPANY NEWS 

I Lasmo lifts 


COMPOSITE INSURERS FACE HIGH HURRICANE COSTS 


BY MCE SMITH 


British Airways yesterday 


added to its pleasure at receiving 
Government clearance to launch 
a bid for British Caledonian by 
announcing interim profits 
ahead of City expectations. 

On sales of £1.86bn (£1.7bn) it 
made pre-tax profits of 5232m in 
the six months to September SO. 
That represented a gain of 65 per 
cent on last year’s 5141m and 
was about 512m ahead of most 
forecasts. 

The tax charge was, at 583 m, 
higher than in 1986 when tax 
losses brought forward reduced 
the figure to 54m. Earnings per 
share were 20.9p (19p) and the 


interim dividend Is Z25p. 

Lord King, chairman, warned 
that recent developments in 
financial markets led to uncer- 
tainty about economic activity. 
Traffic levels remained high but 
BA was watching forward book- 
ings carefully. . 

Analysts said that the fall in 
the value of the dollar would 
make fuel purchases cheaper 
because oil was dollar denomi- 
nated. The cuirency’s decline 
may reduce the number of pas- 
sengers from the US, although it 
was likely to increase the flow in 
the opposite direction. 

Compared with the poor first 


half of last year, when there 
were fears about terrorism and 
Chernobyl depressed tourism, BA 
carried more than 10m passen- 
gers, a 15 per cent increase. 

Passenger load factor was 75 
per cent (66 per cent last year) 
and rose to a remarkable 82 per 
cent in August, said Lord King. 
Analysts had been prepared for 
such figures but their forecasts 
were exceeded because BA dis- 
counted prices less thanex- 
pected- 

FueJ and oil costs were similar 
to last year but operating expen- 

diture rose IS per cent, partly as 
a result of a 16 per cent in staff 


costs, including profit-related 
bonuses, higher staff numbers 1 
and overtime. The cost of new i 
aircraft also rose. 

Profits were concentrated in 
the second quarter when they 
increased 29 per cent from last 
year’s SllOra to 5142m on turn- 
over of &1.06bn (5934m). . 

Traffic figures for. October, the. 
first month in the second half, 
show that scheduled passengers 
rose 11 per cent above the 1986 


Enterprise 
Oil stake 


to 25% 


CU leaps 77% to meet 
forecasts with £127.7m 


By Lucy Kritaray 


BY NICK BUNKER 


- London and Scottish 
■ Marine Oil yesterday 

boaght nearly 8 per cent a t 
the shares In fellow oil 
independent Enterprise OIL 
lifting its' stake to sbpwt 28 
per cent. ' 


LAST MONTH'S British hurri- 
cane will cost Commercial 
Union a net 515m, the compos- 
ite insurance group said yester- 


day as it repeated pre-tax profib 
up 77 per cent at 5127.7m in the 


level Cargo traffic grew by 16 
per cent to give an overall load 


per cent to give 
factor of 69.4 


The move injected life 
Into the sector ■ sending 
mans of the shares of the 
independent «dl companies 
up by nearly 10 per cent, 
' and sparked off lenowed 
rnmonraiu the City about a 
merger between the ' two 
companies. 

However Mr Chris Green- 
tree, Che chief exec uti v e of 
L— o said that the move 
was a "topping up opera- 
tion* designed to rebuild 
his stake t o wards the 29,0 
per cent, before It was 
diluted eaUer this year by 
Enterprise's purchase of 
XCTs oil Interests. - 

Ifa — M Tjymw 

bid for about S per cant of 
Enterprise shares at a price 
of np to SSOp. *Tbe reason 
is pretty simple. These 
shares were at S20p, and so 
at SlOp they looted flood.” 
Mr Greentree added that If 
prices remained lew, Lasmo 
•indended to lucres se its 
•take further to 20.9 per 


improvement of 1.8 pa 

See Lex 


? »r cent, an 
points. 


Latin American provision cuts into AIB 


A PROVISION of 150.5m taken 
above the line for Latin Ameri- 
can debt left Allied Irish Banks 
with pre-tax profits of 1548.1m 
(543m) for the half year to end- 
September, a shortfall of 154.6m 
on the figures for the corre- 
sponding period of the 1986-87 
year. 

Prior to the provision profits 
were showing an improvement 
of S4.9m at 55 7.6m, including a 
510.1m share from the first Mar- 
yland Bancorp associate, up from 
a previous 57.5m. Other associ- 
ates chipped in 51.3m (50.8m). 

Along with the results the 
directors said AIB had continued 
its programme of product diver- 


sification through such develop- 
ments as the launch of Da te-lin k, 
Che new cash management fadl- 


services group. 
Earnings for the 


months emerged at l&Sp ( 21 . 8 p) 
after tax of £ 12.5m (514.7m). 


The company also intended to 
diversify into life assurance busi- 
ness, a natural extension to its 
existing activities. A. proposal 
was being evaluated and AIB 
was expected to make an appli- 
cation to the authorities in the 
coming months. 

The directors said they were 
determined to spread the AIB’s 
geographic and earnings base 
wider and to make the company 
a more broadly-based financial 


The interim dividend is being 
lifted from 5p to 5.25p on the 
enlarged share capital 


comment 

AIB has for some years strug- 
gled with “the Irish question*; 
how Co rectify its over-exposure 
to the weak Irish economy. The 
solution has been to build up 
business in the UK and to buy a 
stake in the US bank First Mary- 
land. The latter, which provided 
more than half the pre-ex cep- 
tional profits increase, has been 


a much more successful pur- 
chase than Midland's buy into 
Crocker. Further good newa yes- 
terday was that AIB has hedged 
the second half dollar profits and 
so is protected from the US 
unit's collapse. But AIB -does not 
currently intend to increase its 
stake in First Maryland above 50 
per cent. However Eire still pro- 
vides- around 60 per cent of pre- 
tax profits and domestic bad 


debt provisions Increased again. 
The likely outcome is for full 


The likely outcome is for full 
year profits to equal last year’s 
15102m, putting the shares, 
unchanged, at 186 British pence 
yesterday, on * prospective p/e 
of just jiver 7. 


up 77 per cent at siZY./m in tne 
first nine months of 1987. 

The group’s figure for net hur- 
ricane Tosses was arrived at after 
allowing for substantial recov- 
eries from reinsurers. CRTs gross 
claims could be at least three 
times bigger than the net 515m, 
the company said. 

CU’s shares dosed up 24p at 
' 317p. even though pre-tax' profits' 
for the nine months to Septem- 
ber 30 were at the bottom end of 
the range of stockbrokers' ana- 
lysts* forecasts of between 
5125m and 5145m. 

Analysts had reckoned without 
an unexpectedly large number of 
Mg UK Industrial fire claims. CU 


suffered n fil.6m underwriting 
loss in the third quarts on this 
dass of business, against a S?Jm 
profit in the same period last 

year. 

At September 30, sharohokfers* 

. « r I* V 4 Jku. alW 


funds were £1.44 bn, up from 
£1.43bn on January L But the 
recent upheaval in financial 
markets" had cut this by IS per 
cent to 51.18bn, CU said: Its. sol- 
vency margin (the ratio of share- 
holders* funds to premium 
Income) has fallen from about 68 

per cent on September 30 to 
about 58 per cent yesterday. 

•comment 

So deep has been investors* 
disaffection with CU since the 
dark loss-making days of 1883-4 
that its gross dividend yield has 
often ran at a Mg premium to 
the stock market Just look at it 


now. Assuming CU makes 5188m 
pre-tax naxt year, ft could man- 
age an 18p dividend to 1968, riv- 
ing a prospective gross yield of 
nearly 8 per pent, against War- 
burg Securities’ current forecast 
for the FT- Actuaries All share of 
5 . 5 . Does this torn CU from the 
perennial recovery stock into a 
defensive buy on a par with Gen- 
eral Accident? Nearly, but not 
quite. Investors need a little 
more time to be totally sure that 
its US insurance loss reserves 
need no radical boost Stockbro- 
kers' analysts need to ask a lot 
more questions about the impact 
on British insures* of US envi- 
ronmental pollution clean -up 
claims. And Adelaide StsunKp 
will need a miracle if its near 
five per cent stake in CU is to 
bring in a bidder in present con- 
ditions. 


General Accident doubles 
profits with surge to £ 181 m 


Williamson 
Tea up 40% 


A 40 per cent improvement in 


Scottish Natl assets 
in 23% downturn 


Scott’s Rest, 
reduces loss 


pre-tax profits, from 53.5m to 
54.9m, was reported by William- 
son Tea Holdings for the year 
ended June 30. 

Sales for the company, which 
owns shares in tea producing 
companies in India, Kenya and 
Tanzania, rose to 536.64m 
(532.18m). The directors said it 
was unlikely that results for the 
current year would reach those 
under review. 


BYNKK1TAJT 


They are recommending an 
inchanged final dividend of IOdI 


unchanged final dividend of lOp 
to maintain the total for the year 
at 20p. Earnings per 51 share 
jumped to 74^2p (47-54p). 

Tax took 52.05m (51.89m) and 
minorities 51.16m (5737,000). 


Scottish National Invest- 
ment Trust, the large Gart- 
more-managed general fund 
which decided to convert to 
split-level status last month, yes- 
terday revealed that its total 
assets fell by 23 per cent during 
October - the month when stock 
markets crashed. 

Total assets reached 5322m at 
the end of September, but had 
reduced to 5249m by the end of 
October. The conversion actually 
took place in early October, and 
part of the necessary portfolio 
change was achieved by a 5100m 


Shareholders, however, have 
been fairly well protected 
against the downturn as a result 


against the downturn as a result 
of the split-level conversion 
scheme. Gartmore calculates that 
anyone who held shares at 447p 
on September 1, when they were 
trading at a 10 per cent discount 
to net asset value, would have 
owned the equivalent of 427.9p- 
worth of the four new topes of 
shares, plus warrants, by the end 
of October. That represents a 4.3 
per cent decline - against a 23.5 
|>e rce nt drop in the FT 80-Share 


First half 1987 figures -from 
Scott's Restaurant showed 
turnover 'up from 55.28tn to 
55.42m, and the pre-tax loss 
reduced from 5418,000 'to 
5308400. 


Figures included the lose of 
Connaught Rooms for the period 
until they were sold as part of 
Connaught Restaurants In ApciL 
The loss on disposal was shown 
as an extraordinary debit of 
5501,000. 


Rumours of mergers 
between Lasmo and Enter- 
prise have beau rife this 
year. However, the Issue Is 
complicated by the Govern- 
ment's "golden share" in 
Enterprise, which expiries 
at the end of next year and 
by the presence of ICI, 
which owns U 'per cent 
stak e in Enterprise, and 
ETZ, which ow ns g J per 
cent of Lasmo. RTZ, which 
has hitherto been prevented 
from bidding for Issns, 
will be free to do so after 
December 20 this year. 


PERTH-BASED' General Acci- 
dent, composite insurance 
group, brushed aside the impact 
of turmoil in the financial mar- 
kets yesterday as it announced 


pre-tax profit figures more than 
doubled at 5180.6m for the nine 


doubled at 5180.6m for the nine 
months to September 30, writes 
Nick Bunker. 

It said that the foil in equity 
market values would have “no 
effect” on its ability to trade 
expansively, there would be *no 
foreseeable Impact'' on its divi- 
dend -pay ing pr ospects. General 

However, Mr Bochan Marshall, 


chief general manager, struck a 
mildly pessimistic note about the 
industry's operating environ- 
ment, after nearly three years of 
a cyclical upturn - in non-life 
insurance pricing in the US and 
the UK. 


"The pace of the improvement 
cannot be expected to continue 
at the present level for very 
long," he said. 

Claims arising from the roM; 
October UK hurricane would 
cost the group a gross 540m in 
the fourth quarter,- but this 
would fall to a net 530m after 


allowing for recoveries from the 
reinsurance industry, he said. 

Worldwide, non-fife Insurance 
premiums in the first nine 
months grew by an underlying 
14.7 per cent to 51.74bn, but the 
group's global underwriting loss 
was more than halved from 
5133.6m to 565m. 

Investment earnings were 
5233m higher at 5238.2m, while 
profits from life assurance and 
pensions business grew 32 per 
centto59Jxm. 


Hughes Food Lep property expansion 


Undeterred by ike f*Ho*t 
in share prices in recent 
weeks, the acquisitive 


BY OA^O WALLER 


Braithwaite boys 


programme trade. Partly as a 
result of the portfolio rhang fts . 
in particular, the reduction in 
low-yielding overseas invest- 
ments - liquid .assets (cash and 
gilts) totalled 568m by the end 
of October, or almost one-quarter 
of the portfolio. 


PROPERTY Holdings has sold a 
7.5 acre site on its retail park at 
Leamington Spa to J. Sainsbury 
for -over 58m. It will be devel- 
oped into a major food store. 


Results for Scottish National 
in the year to the end of Septem- 
ber, released yesterday, showed 
net revenue before tax of 56.24m 
(£5A6m), and a 42.8 per doit 
increase in net asset value dur- 
ing the year to 510jt 


Braithwaite Gi 

51. 35m cash for 


Pumps, used in swimming pools. 
Vendor was Ctest Nicholson. 


Vendor was Ctest Nicholson. 

Calorex profit for .the 11 
months ended September 30 
1987 was 5222,000,' with net 
assets af 5496,1)00. 


wrecks, the acquisitive 
Hughes Food Group |s 
returning to the takeover 
trail with the acquisition of 
a 7S per cent state la S&A 
Foods (Midland), a pro- 
ducer of ready-made Indian 
and C h inese rtifllorf V 
la to be satis- 
fied by the allotment of 
19,230 new Hughe# ordi- 
nary. 


Lep Group, mainly involved 
in fright forwarding, is extend- 


ing its property interests with 
the 519.68m acquisition of a 


e 519.68m acquisition of a 
rtf olio of properties from' 


The portfolio consists of eight 
freehold properties and one long 
leaseholo property, with a spread 
of uses ranging from a shopping 
centre in Nuneaton and an office 


building in central London cur- 
rently let to a government 
department , 

Independently valued at S22m, 
the portfolio is being bbught for . 
52m. cash and tbs issue to the 
vendors of 4.78m new Mures in 
Lep, representing 6 per cent of 
Lep’s enlarged share capital. 
There will be a further cash con- 
sideration of 511.25m at the end 
of next year. 


•comment 

October’s global stock market 
d eb acle took 5500m off General 
Accident's shareholders* funds. 
No matter, .say the Highlanders. 
Pre-tax results. at the very top of 
City forecasts of 5160m to 
5180m helped push the shanft 
UP 56p to dose at 8Q8p. But the 
market crash bas also reinforced 
Gen Arc's case that it was right 
all along to keep {(is solvency 
margin at levels which last year 
made it look hugely dverrcapttab 
ised but now underline strongly 
its powera to make healthy divi- 
dend increases. Even after the 
recent equity market camaga, 
the group still has shareholders' 
funds of S1.75bn, and a solvency 
margin of 74.8, nearly 60 points 
dear of the statutory minimum. - 





mmm? 



v . V • • .. *••• -■ ; :i: .. • U Jr = ^zm gjSggsHffi gBgg 

! ,: ■ ' . : =^§ssSsp8g| 



MONTHS* 




ASSURANCE 


Ultramar 


1987 - THE FIRST NINE MONTHS 

PROFIT IMPROVEMENT CONTINUES 


★ Operating profit before taxation increased by 77% to £ 127.7m. 

it Underwriting results contaHied to improve in the United Kingdom and United States. O ur curre nt best 
estimate for tLe cost of tfae October storms ip the United Kh^om, after reinsuranre recoveries, is 
£15nu The amount tofflbediarged in die 4th quarter, 

it life and financial services activities made good progress. 

★ Shareholders* funds amounted to £i,440m at 30 September amt the solvency ratio was68-4%.The 
recent upheaval in fmandalmarkete is esmnated to trayeWucedsha^eholde^s , funds at 6 Novemhex by 
18% to £1^75m. The solvency ratio remains strong at 58j0% 


MAIN FEATURES OF RESUITS 


Quebec Refinery throughput at a 
quarterly record of 102,900 b/d 

Canadian gasoline sales at a quarteriy 
record of 45,100 b/d 


Net profit before extraordinary items up 
to£39.8m 


Cash flow over&lOOm 


Major gas discovery in the Netherlands 
North Sea 


Financing charges cut by 30% compared 
with 1986 


Total pren 
life profits 
Non-life or 


income 


Rntffirw 
Months 
1987 
£ million 


first Nine 
Months 
1986 

£ million 


SALES REVENUE 

857.8 

989.6 

PROFIT/(LOSS) FROM CONTINUING OPERATIONS 

30.8 

(9-7) 

NET PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS 

39.8 

(20.2) 

EARNINGS PER SHARE 

14.4p 

(7-4)p 

CASH FLOW FROM CONTINUING OPERATIONS 

100.8 

804 


Non-toe o p e ra ti n g result 

Operating profit before taxation 

Taxation and minorities 

Realised investment gains 

Profit attribotabte to shareholders 

Shareholders* funds 

Earnings per share 


9 months 

1987 

Unaudited 

£m 

2,256.3 

6 U 

66.6 

127.7 

(4SS) 

58.1 

137.0 

■ iMo 

32-80p 


9momhs 
1986 
Uttaucfited 
' £m 

2,092.1 

58.2 

14.0 
7Z.2 
(25.8) 

56.0 
102.4 
1360 

24.82p. 


Year 

1986 

Aiidiced 

- £m . 

2,765.9 

88.2 

30.9 

119.1 

(36.4) 

77.2 

159.9 

1,428 

38.77p 


OUTLOOK 

‘\Vc have adapted our operations to the lower worldwide oil and gas price structure, and have 
confidence tliat our strong oil and gas reserve position and Eastern Canadian downstream 
core business will provide the basis for growth." 

Lloyd Benson 
Chairman 


Operating profit before taxation 

United Kingdom 

United States 

Netherlands 

Canada 

RestaftheMfodd 

Interest on central borr o win g —external 

— intra-group 


£m 

97-4 

(1-5) 

31,9 

63 

223 

(14.0) 

05.1) 

127?7 


£m 

59.9 

(223) 

37.6 

.83 

IM 

(I73> 

il34) 

723 


£m 
973 
. C&A) 

■ 50.1 ■ 
6:2 
29.1 
(223) 


ULTRAMAR PIC. 141 MOORGATE. IDNOON EC2M 6TX 


ASSURANCE 


Assurance Company pic 


«iW* 

i- 






.i-ifi r- 


^ J .’*:- $»* 




n\ v 


i 

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! manual r i me v Thursday November 12 1987 


27 1 

• . /ih 


rubles 
> £181 ( 




UK COMPANY NEWS 


Ultramar at £31m for 9 months 


BY LUCY KCLLAWAY 

Ultramar, UK oil indepen- 
dent, yesterday announced a 
third-quarter profit of 59m, com- 
pared to a loss of 54.3m in the 
same period last year. 

Far the first nine months of 
the year the company made a 
profit of 530.8m compared to a 
loss of.S9.7m in the first three 
'quarters of 1986. In the third 
'quarter cash flow was £29-6m. 
, an increase of nearly &5m on the 
. comparable period. 

The company said that there 
were three main reasons for the 
.improvement. The rise in oil 
.-prices boosted profits from the 
, North Sea and from Indonesia, 
-while the Eastern Canadian 
refining and marketing divisions 


continued to Improve. Ultnunar- 
safd that In Canada it was head- 
ing for a record year. The group 
also benefited from a 30 par cant 
reduction in interest charges 
stemming for the fail. in its bor- 
rowinjEs. and from a reduction in 


Mr Lloyd Bensen, chairman, 
aairi he was confident that fol- 
lowing recant restructuring the 

baas for growth had. been laid. 
Business , prospects for the fourth 


exchange rate movements. 

During the quarter Ultramar 
said it made a major 'gas discov- 
ery in the Nfefcherlaiids in block 


J/6 and achieved the highest 
ever sales of gasloine in Canada. 
In Quebec, refinery ultiHpodon 
cached its highest levels since 
1983. 

The company has continued to 
dispose of non core business, and 
in the three months to Septem- 
ber sold its share in a Canadian 
pipeline at a profit of SP-ftm, and 
its New York barge operation at 
a profit of 52.6m. 

"comment 

The 10 per cent rise in Ultra- 
mar's share price yesterday to 
167p may have as much to do 
with Lasmo's purchase of Enter- 
prise shares as to this solidly 
respectable set of results, u 


COMPANY NEWS IN BRIEF 


.EXTERNAL INVESTMENT 
-raising interim dividend to 9p 
•f7.5p) and forecasting total 20p 
for year ended March 31. 1988 
(18p). Earnings for half year 
1426p (11.48p) and fully diluted 
14.76p (11.55pj from net revenue 

5942,000 (5759,000). Net asset 
value 961.8p (7i7„5p) and fully 
diluted 904.7p (688.4p\ 
YEARLING BONDS totalling 
51. 25m at 8.75 per cent; redeem- 
able on November 16 1988,have 


"been issued by the . following 
local authorities. Dundee (City 
of) District Council 51.0m: West 
Lancashire District Council 
50-26. 

BRITISH & COMMON- 
WEALTH Holdings, financial 
services group, has increased Its 
holding in Singer & Friedlander, 


7.15 per cent when it nr 
stake in late September. 


DIVIDENDS ANNOUNCED 


“i 


Date ’ 

Correa - 

Total 

Total 


Current 

of 

ponding 

for 

last 


payment 

payment 

div 

year 

year 

, ^Allied Irish .... int 

5.25 


5 

_ - 

1126 

- British Airways —int 

525 

Jan 16 

- > 

- ‘ ■ 

4.12 

-Ellis Goldstein .—..int 

0.9 

Dec 29 

0.9 

_ . 

- 2.6 

•Equity Consort —int 

428 

Jan 4 

426 


14.3 

External Inv. int 

9 

. 

75 

-* ■ 

18 

Great Portland ....int 

2.75t 

Jan 14 

2.5 . 


7.3 

“ - Hnlewood Foods Jnt 

LIS 

Jan 21 

1 

. 

22 

•yi.rft-T.fc.ivj Wti 

02 


0.7 

L3 

1.1 

'Land Securities —int 

3.66 

Dec 14 

&26 

_ . . 

11 

iOcean Wilsons ...—int 

05 

. 

0-5 


2 £ 

RegsBan Props — int 

; 1 

Jan 6 

063* 

■_ 

sr 

Smiths hub fin 

• 4 tit 

Jan 6 

875 

0.5 

65 

Wade Potteries .—.fin 

3 

- 

2.4 

426 ‘ 

35 

•WIIHimnna Tea fin 

10 

- 

10 

20 

20 


Dividends shown pence per share net except where otherwise stated. 

S uivalent after allowing for scrip issue. fOn capital increased by rights 
/or acquisition issues. §USM stock. Unquoted stock. Third market 
fTotal of 20p forecast *Irian currency throughout 


.and/or acquisition issues. 
JtTotal of 20p forecast *lii 


currency throughout 


THOMAS ROftZNSON GROUP 
has bought 75 per cent of the 
capital of R. Simon (Dryers) for 

5148.000 cash and the allotment 
of 14,000 new shares. On Decem- 
ber 1, Robinson will buy the 
remaining 25 per cent for a fur- 
ther £66,000 cash. 

LANCASTER is buying G Eric 
Hunts (Leeds) for a total of 
52.5m cash, conditional, inter 
aba, on Hunts pre-tax profits for 
the year to end-September 1967 
being* not less than 5450,000. 
Directors estimated that net 
assets at that date would be not 
less than 5700,000. Hunts oper- 
ates a BMW franchise in Leeds. 
BONDED LAMINATES Pro- 
files has acquired Woodtape for 

5700.000 to be satisfied by the 
allotment to certain of the ven- 
dors of a total of 168,000 new 
ordinary. The balance was paid 
in cash from the group's* 
resources. Woodtape specialises 
in the manufacture and supply 
of edgebanding and impregnated i 
non-woven materials tor the fur- j 
nxture industry. 

J H WOODINGTON, Drogheda 
(1936) (ladies fashion footwear): 
Pre-tax loss 1596,181 (L£53£13) 
for six months to June 30 1987 
and for 1986 598,833 (£179,711). 
Turnover 5211,521 (5346,000) 
and 5650,974 (5786,804) respec- 
tively. Losses per share for the 
six months 32.43p (18.54p) and. 
for the year 34-35p (61-31p> 


Lasmo's spree has brought asset 
values bade into fashion, then 
Ultramar, which on some City 
calculations is trading at half the 
value of its assets, stands to do 
well. Meanwhile . these results 
show its efforts to focus the 
group mare sharply are paying 
off. It is only unfortunate that 
much of the progress will be 
hampered by the latest foil in 
the Canadian dollar, which could 
cut full year results by more 
than 55m to about 550m or so. 
With such a blameless perfor- 
mance in what tends to be Ultra- 
mar’s weakest quarter, it is ques- 
tionable whether the padding 
provided by sqeezing the Canar 
dian pipeline profits in above the 
line was really necessary. 


Newmarket Co 
assets hit by 
US downturn 

Newmarket Co, venture capital 
company, reported a. reduced net 
asset value of $2.15 for the nine 
months to September 30 1987, 
against 42438 last time. 

Total revenue from operations 
came to $739,000 ($679,000). 

The chairman said that the 
reduction in net asset value was 
attributable to a particularly 
severe foil in the market value of 
the company's quoted US hold- 
ings, but the company had a 
number of exciting investments 
which had made significant 
progress in the last quarter. 

Grampian Holdings 
in French purchase 

Grampian Holdings, the 

Scottish sporting goods conglom- 
erate, is buying the assets of Pat- 
rick SA, a French sports com- 
pany best known for its range of 
rugby and soccer boots which is 
now in receivership. The cash 
consideration is FFr22m 
(522m). 


Granada 

to decide 
soon on 

ERbid 

BYNBKKf TAIT 

Granada, the TV and lei- 
sure group which launched 
a Siam takeover hid for 
Electronic Rentals, a rival 
company in the TV and 
video rental business, on 
Monday, said yesterday 
that it would decide 
whether to p r oceed “within 
the next few days." 

On Tuesday, BR firmly 
rejected the bid, describing 
it as "unacceptable both In 
form and value.” Granada 
i said yesterday that it 
regretted that directors had 
been unwilling to discuss 

"its generous offer and 

thereby are prepared to 
deny their shareholders the 
opportunity of considering 
the offer far th ems e l ves". 

Granada's protracted 
response, however, 
appeared to be some com- 
fort to Electronic Rentals. 
"They're wavering, aren't 
they 7 Our position fc— not 
changed in any way - they 
should have know this 
would happen,” commented 
Mr Christopher Roper, the 
company secreta ry. 

Last night, Mr Derek 
Lewis, Grenada's finance 
director, said that the com- 
pany had realised "that 
there was always a possibil- 
ity that.ER management's 
initial reaction would be 
negative." However, he took 
some comfort from the form 
of rejection • "it's for from 
being an outright rejection - 
If yon read the wording 
carefully, they're *»nHug 
about form and value. ” 

The attitude of Philips, 
the Dutch electronics goods 
giant which holds 22.4 per 
cent of ER's shares also 
appears critical. Philips rep- 
resentative, Mr Frans Rnlo 
who holds a non-executive 
post on the board, gave Ids 
fall backing to Tuesday’s 
'rejection. 


Lilley moves back to profit 
midway as US problems ease 


BYFWMA THOMPSON 

. FJ.C. Lilley, Glasgow-based 
construction company, which 
plunged 550m into the red last 
year because of problems in its 
US tunnelling operations, has 
swung bade into profit for the 
half year to July 31. The com- 
pany yesterday reported pre-tax 
profits of 5624,000 for uie six 
months, compared with a loss of 
524.48m for the same period last 
year. 

"It is a fairly remarkable turn- 
around and it will continue,” 
said Mr Lewis Robertson, who 
took over as chairman last 
December and brought in Mr Joe 
Barber as chief executive. The 
US businesses had caused a deep 
haemorrhage in Lilly, but half 
had now been sold and Lilly 
hoped to sell the one outstanding 
company, Harrison Western, 
soon. ‘They cannot sink the 
whole group now," said Mr Rob- 
ertson. 

Turnover was static at 
585.82m (584.61m). Of 54029m 
North America safes, 514m was 


FT 


A FINANCIAL TIMES 

INI'EKNaTIONAL 

CONFERENCE 


WORLD 

ELECTRICITY 

London, 

16 & 17 November. 1987 


Fa r informatio n, «-mse return this 
advertisement, together irihyour 
hshutcadfr 
Unsocial Times 
i uomcrence ur ga n rum ofi 
1 2nd Floor 
126 Jermyn Street 
London SW1Y4UJ 


telephone 61-925 2323 
telex 27347 FTCONFG 
Fax: 01-9252125 


in discontinued businesses. 

The UK construction side's 
contribution to operating profit 
rose to 52.16m (51-52). Interna- 
tional construction showed a 

5508,000 profit against a £6 -23m 
loss, and the US and Canada loss 
decreased to 5821,000 compared 
with 519.96m last time. Property 
development and investment 
contributed 51.04m (529,000), 
mainly on the sale of property 
due to disposals. 

The interest payable was 
S1.94m (£l.37m). A tax charge 
of £551,000 compares with a 
credit of 53.85m last year. An 
extraordinary debit of 53.36m, 
relating exclusively to discontin- 
ued activities in the US, has left 
shareholders' funds at 515.11m. 
Earnings per share were 0.09p, 
against a 24.01p loss. No divi- 
dend was declared. 

•comment 

Lewis Robertson, brought in as 
the company doctor, is confident 


Lilley is on the mend. Certainly 
yesterday's figures are a healthy 
sign that he appears to have got 
the prescription about right. 

Though still over 100 per cent 
geared, borrowings are down 
from a peak of 557.4m to about 
521m and bank support has been 
confirmed until September 1989. 

The bulk of the peripheral com- 
panies have been sold and all 
efforts are going into boosting 
the four UK core companies and 
a very specialised, limited inter- 
national operation. Contracting, 
especially tunnelling, is one of 
the most risky businesses there 
is. Lilley’s main task now is to 
convince companies that it can 
be trusted with the big contracts. 

The shares closed 6p up last 
night at 40ftp. Assuming pre-tax 
profits for the full year of 52.5m, 
that puts them on a very high 
prospective p/e of 19. 


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BANKING, FINANCE & INVESTMENT 

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TUESDAY 15th DECEMBER 1987 

For further Information please contact: 

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£9 par Single Caiman cat extra (Mia 30 cau) 
AH prices ndflfe VAT 
For farther cktaHs mite to: 
Classified Ad vertise me nt Daagtr 
FINANCIAL TIMES* 

10 CANNON STREET, 
LONDON EC4P «Y 


FINANCIAL TIMES 
CONFERENCES 


, World * 
laecommunicatioiis 

1 and 2 December; 1987 
London 


Fo rM o mwUonuham irt wnHt 
xtimtisesment, together wHh your 
ftuafcMSBcar&lo: 

Financial Timas 
-Co n i — u oaO m an fs rilo n 
2nd Floor 
1 26 Jonnyn Street 
London SW1Y4UJ 
Alternative# 
telephone 01-925 2323 
telex 27347 FTCONFG 
Rax;' 01-925 21 25 


NOTICE OF REDEMPTION 
Tb die Holders of 

FINANCE FOR INDUSTRY LIMITED 

(dow Investors in Industry Group pic) 

9%% Sterling' TJ.S. dollar payable Bonds 1987 

This is to remind you that December 15. 1987 Is an annual redemption date as well as the 
final maturity date far the Finance far Industry Limited (now Investors in Industry Group pic) 
Sierling. ILS. dollar payable Bonds due December 15, 1967. On December 15, 1987, all of 
the outstanding Bonds irilf become due and payable at 100% of their nominal value. Interest will 
lie paid in tbe usual manner. 

Said Bonds may be presented for payment to Morgan Guaranty Trust Company of New York. 
30 Wot Broad wav. New York. New York 10015 or to toe other frying Agents named on tbe Bonds. 

Bonds* surrendered for pavment should have attached all unmatured coupons appurtenant 
thereto. Coupons due December 15, 1967 should be detached and collected In tbe usual manner. 

PAYMENT WILL BE MADE ON DECEMBER 15. 1987 AGAINST SURRENDER OF BONDS 
IN STERLING OR. AT THE OPTION OF THE BEARER, IN U.S. DOLLARS CALCULATED AS 
SET FORTH IN CONDITION 6 OF THE BONDS. SUCH OPTION TO RECEIVE DOLLARS IS 
IRREVOCABLE AND MAY BE MADE ONLY BY THE PRESENTATION AND SURRENDER 
OF SUCH BONDS. TOGETHER WITH A COMPLETED NOTICE OF EXERCISE OF DOLLAR 
OPTION. ATTHE PRINCIPAL OFFICE OF .ANY OF THE PAYING AGENTS NOT LATER THAN 
DECEMBER 4u 1987. INTEREST ON THE BONDS IS PAYABLE ONIY IN U.S. DOLLARS. 

Pavmenis will be made (!> in the case of any payment to be made In pounds sterling by a 
check drawn on, or by transfer to an account maintained by the payee vfftn, a bank in London, 
subject In each case to any laws or regulations applicable thereto, and (13) In tbe case of any 
payment to be made in L'.’S. dollars, at any agency outside New York City by a check drawn 
on a U.S. dollar account, or by transfer to a ILS. dollar account maintained by tbe payee with 
a bank in New York Citv. subject in each case to any laws or regulations applicable thereto. Anv 
payment made within the United States or transferred to an account m ai n tai n ed by a non-U.S. 

E yee w iih a bank in the United States may be subject to reporting to the United States Internal 
venue Service ( IRS I and to backup.withholdiiq! at a rate of 20% if payees not recognized as 
exempt recipients fail to provide the paying agent with an executed IRS Form W-8 certifying 


perjury the payee's taxpayer identification number (employer identification number or social 
security number, as appropriate! to avoid 20% withholding of the payment. Failure toprovide a 
correct' taxpayer identification number may also subject alii, payee to a penalty of $S0. Please 
therefore provide the appropriate certification when presenting your securities far payment. 

From and after December 15. 1987 interest shall cease tb accrue on the Bonds. 


INVESTORS IN INDUSTRY GROUP PLC 


Dated: November 12, 1987 


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Road refurbishment represents a niche market. 
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V 







General 


O' - • •' • • s .• 

v. {,:*• . : 

/*v ./ v * . XW < / * * 




NINE 




< 1.-- - v vs v n-.-.-yrry* yy - T jyy vgfwt v- ^gra^ 1 


The results for the nine months ended 30th September 1987. estimated and 
unaudited, are compared below with those Tor the similar period in 1986, 
which are restated at3Ist December 1986 rates of exchange; also shown are 
the actual results for the full year 1986. 

It must be emphasised that the results for the interim period do not usually 


Jt must oe emphasised mat me results iorme imenm 
provide a reliable indication of those for the full yean 


Premium Income 
General Business.... 
Long Term Business 


9 Months 9 Months Year 

to 30.9.87 to 30.9.86 1986 

Estimate Estimate Actual 

£ Millions £ millions £ millions 


Investment Income (see note). 
Underwriting - 
General Business Result .... 
Long Term Business Profits ... 


Less Interest on Loans 

UK Employee Profit Sharing Scheme. 

Profit before Taxation 

Taxation - UK and Overseas 

Profit alter Taxation 

Minority Interests and 
Preference Dividend 


180.6 

87.8 

123.2 

35.6 

5.3 

10.1 

1454> 

82-5 

113.1 

2.1 

1.5 

2J 

142.9 

81.0 

1108 

764p 

442p 

60.5 p 

S1.63 

SI.48 

Sl.48 

S2.13 

$2.05 

S2.05 


Net Profit attributable to Shareholders 142.9 81.0 110 _S 

Earnings per Ordinary Share 76.6* 44J2p 60.5 p 

Principal exchange rates used in 
translating overseas results 

U.S.A. 51.63 SI.48 Sl.48 

Canada S2.I3 $105 S2.05 

Note Investment income excludes £7.9m (1986 £8.6m) representing amortisation 
of U.S. deep discount bonds which under the LLS.A. accounting conventions 
would be credited to earnings. 


ANALYSIS BY TERRITORY OF GENERAL BUSINESS PREMIUM INCOME 
AND UNDERWRITING RESULT 

9 months to 30.9.87 9 months to 30.9.86 

PreamUB Underwriting Premium Underwriting 



Income 

Result 

Income 

Result 


£m 

£n> 

£m 

£m 

U.K. 

604.5 

(12.0) 

531.2 

(48.9) 

U.S. A. 

615.2 

(38J) 

5901 

«54_5> 

EEC other than U.K. 

114.2 

(9,7) 

102.9 

(16.0) 

Canada 

210.3 

44 

194.0 

(5.3) 

Others, including 





London Market Business 

195.4 

<9 2) 

167.2 

(8.9) 


1.739 j6 

(65 At 

1.585.4 

(13345) 





. 1 


9.7% and 10.8% respectively. Adjusted to exclude the effects of currency 
fluctuations, the increases were 14.7% and 16.8% respectively. 

In the third quarter there was a worldwide underwriting loss of £8 im (1986 
£35.9m loss) including a profit of £7.9m (1986 £12.1m loss) in the United 
Kingdom and a £6.9m loss (1986 £15.0m loss) in the United States. In the 
aggregate othermarkets produced underwriting losses of £9 -5m (1986£8.8m 
loss). The pre tax profit for the quarter amounted to £78.2m (1986 £38.4m 
profit). 

For the nine months in the United Kingdom there was an underwriting loss 
of£I2.0m (1986 £48.9m loss). With a much reduced loss in the quarter the 
motor account reported a loss of £12.6m (1986 £26-3m loss) at the nine 
months stage. The improvement in the Homeowners account at the half 
year was maintained with a profit in the quarter reducing the loss to £5.6m 
(1986 £8.9m loss). Experience in the Commercial Property account was 
favourable with a profit for the nine momhs of £6.5m (I986 £9.6m loss). 

For the nine months net written premiums in the United States totalled 
SI, 003m (1986 $873m) with an operating ratio of 105.75 % as compared with 
108.76% for the same period in 1986. On the United Kingdom accounting 
basis the underwriting loss was £38.5ro (1986 £54.5m loss). Some 
improvement was seen in most major lines particularly commercial. 

All major territories and particularly Canada are showing substantial 
improvement at this stage. The small decline in othermarkets is attributable 
to internal reinsurance experience. 

New annual life premiums for life business in the United Kingdom in the 
first nine months of 1987 were £25. 3m (1986 £21. 9m), and single premiums 
£28.0m ( 1986 £22.9ml. 

The extreme storm damage which affected the United Kingdom in mid 
October is estimated to have cost approximately £40m gross. £30m net of 
external reinsurance. No provision for these losses has been made in the 
nine months statement. 


General Accident Rre & Life Assurance Corporation pfc. 

"'Xforid Headquarters: Pidreavlis, Perth, Scotland PH2 0NH. 



VEHICLE CONTRACT HIRE 


economy 
of scale 



A COW/E GROUP COMPANY 


LONDON Tell 01-404 0509 
BIRMINGHAM Teh 021-632 4222 
MANCHESTER Tel: 061-973 2305 
Head Office. 1 87 Broad Street SWinghom B 1 5 1 ED 


UK COMPANY NEWS 


Land Securities up 11% 
to £64.5m midterm 


BY MARTIN LUCX80N 

Land Secazitteo, Britain’s lar- 
gest property company, yester- 
day announced an 11 per cent 
increase in interim jure- tax prof- 
its, from £ 58 . lm to S64fim, and 
said its ordinary taxable income 
in the second half was not 
expected to differ materially 
from the first half. 

Earnings per share totalled 
8.32p (7.51p) and there was a 12 
per cent rise tn the interim divi- 
dend, from 3-25p to 3.65p. 

Mr Peter Hunt, managing 
director, commenting on last 
month's collapse In share prices, 
said that while this might have 
knocked the froth off the top of 
the property sector, "the under- 
, lying strength of prime property- 

is still there and we are confi- 
dent of our developments in the 
City and central London and the 
locations In which we are work- 
ing." 

Land Securities was not depen- 
: dent on the financial companies 
sector, which in any event was, 
not the only type of City tenant. 
The group, he added, was in a 
very strong financial position to 
carry out its development pro- 
gramme, manage its portfolio 


and acquire building - including 
buying opportunities which- 
.might be thrown up by the stodc 
market crash. 

In the six months to Septem- 
ber 30, Land Securities produced 
rental income .of £96 JSm 
(SSSJhn), while 91 4 .9m (Sfl Tni l 
of interest receivable boosted 
total income to 5llS.6m 
(597.6m). The group has raised 
5384m in the current year, 
which It said gave it sufficent 
cash resources to fond its cur- 
rent development programme. 
Aggregate borrowings ..exceed 


The group said that it was 
maintaining good progress with 
its development programme, 
although tne start of certain 
projects had been subject to 
delay. Work was under way on 
two City office buildings - 
including Salisbury Square 
House - which were both under 
offer to prospective tenants. Fol- 
lowing the grant of planning per- 
mission , work was planned to 
start between January and Jane 
on a further 700^)00 square feet 
in the City, West End and Victo- 
ria. 


•comment 

Long regarded as the sleeping 

e ant of the property sector, 
tnd Securities has stirred itself 
j ntn a much more interesting 
operation under the leadership 
of Peter Hunt, who has been 
managing the portfolio far more 
aggressively. And the great 
crash, switching investors' inter- 
ests from earnings to assets, has 
added to its attractions. What- 
ever the outlook for City prop- 
erty rentals and values- Land 
Securities remains wen-cush- 
ioned. Its average rentals are far 
below the frothy peaks i w t rivri 
recently and reversions shi ’ * 
continue to ensure a healthy 
in Income. At the same time, the 
quality of its central London 
Sites is high and it has A good 
mix between office and the still 
booming retail sector, where Its 
warehouse portfolio is approach- 
ing 4m sqJt With nil currency 
exposure, an extremely strong 
balance sheet, and plenty of 
cash, it is a core defensive bedd- 
ing in the sector. About 5130m 
pre-tax should be achievable In 
the full year, with a prospective 
n-a-v. of about 610p a share, 
co m pared with last night's close 
of 443p. 


Regalian trebled to £12m 


BY MARTIN DICKSON 

Regalian Properties, residen- 
tial developer, which sold a new 
headquarters building . to the 
Financial Times, last summer, 
yesterday announced a near 
trebling of interim pre-tax prof- 
its, from 54.1m to Si 1.6m. Earn- 
ings per share were up 61 per 
cent from 5.37p to &66p 

In the six months to Septem- 
ber 30 turnover totalled 52&3m 
(SI 4.9m). Interest receivable was 
£902,000 (£163,000), while inter- 
est payable totalled SI 7.000 
(512,000). Tax took £4im 
(51.4m). The interim dividend is 
lp (0 62p), an increase of 60 per 
cent. 

Mr David Goldstane. managing 
director, said that while the com- 
pany was not complacent about 
possible continued uncertainty 
in the financial markets, it had 


the capacity to withstand the 
problems this might imply. It 
had seen no slackening of inter- 
est among purchasers for the 
three developments it had 
released ^ nrsi pim-if Monday. 

The company's plans to 
develop a block of 20 exclusive 
flats in Kensington Palace Gar- 
dens would not be affected by 
the crash, since the potential 
buyers were extremely wealthy 
people for whom this was a mere 
hiccup. The development 
includes four penthouse apart- 
ments costing about 56.5m each. 

•comment 

Regalian occupies a unique 
niche in the housing market, 
combining a number of good 
London sites, particularly on the 
river, with a reputation in the. 


provinces far the refurbishment 
of former council houses. The 
Horseshoe Court coup ensures it 
a very strong profits base this 
year and for the .next two and 
gives the management the 
opportunity to take, a longer- 
term strategic view of the mar- 
ket. its exposure to docklands, 
which in the wake of Black Mon- 
day suddenly a much leas 
exciting growth prospect, Is lim- 
ited to the more solid end of the 
market, while the Kensington 
Palace Gardens scheme demon- 
strates its imaginative stretching 
of wings. Pretax profits 
shmould reach 521 jn for the 
year. p«ttng the shares, which 
closed at Hop, on a prospective 
p/e of about 7b. Even in today’s 
markets that looks cheap on a 
two-year view. 


Klark-Teknik up 26% £t Portland 


Klark-Teknik, designer and 
manufacturer of electronic 
equipment, boosted taxable prof- 
its by 26 per cent on turnover up 
more than 51 per cent in the 
year to July 31 1987. Profits rose 
from £907,000 to 5 1.14m on 
turnover ahead from 5237m at 
54.49m. 

The directors prop o sed a final 
dividend of Ofto (0.7p), making a 
total of lUp (tip) for the year. 
After tax, up 5100,000 at 
5431,000, earnings per 5p ordi- 
nary share Jumped tram 33p to 


43p. 

Mr Philip Clarke, chairman, 
said that the group had seen 
-growth in all Its major world 
markets: exports amounted to 84 
per cent of turnover and the US 
and European markets grew by 
47 per cent and 44 per cent 
respectively. US growth would 
have been higher but for the 
decline in the value of the dollar. 

Dearden Davies Associates 
recorded sales of 51.79m 
(5982,000) in its first full year as 
a subsidiary of Klark-Teknik. 


Peachey rights flop 


THE MARKET rally is - so far - 
proving too little, too late for 
those companies with outstand- 
ing rights issues. 

Yesterday ft was the turn of 
Peachey Property to report 
titaz shareholders have taken up 
just 1JZ per cent of its 531.8m 
cash call. Peachey had said the 
reasons for the Issue were "to 
strengthen the equity base, 
reduce b o r rowings and maintain 
expansion.* 

The rights price was set at 


380p, a 15 per cent discount to 
the ruling market price ahead of 
the issue announcement. How- 
ever, by the time the cash call 
closed on Tuesday afternoon, 
price had dropped to 300p. 

Last week, about 5500m-worth 
of unwanted rights Issue stock 
ended up with the underwriters, 
and already this week has seen 
flops in a 528m issue by Local 
London, and a 56m call by coin 
and medal manufacturer, Bir- 
mingham Mint 


interim rise . 

Great Portland Estate*, the 

property investment company 
chaired by Mr Richard Fokin, 
incre as ed its rental income by 
51m to 513.86m over the six 
months to and -September and 
for the period saw its revenue 
Before tax rise from 510.4m to 
512.06m. 

After tax of 54. 1m (5852m) 
net revenue worked through at 
5796m (56.88m), equal to earn- 
ings of op (4£p) pet 60p share. 
The interim dividend is 'being 
lifted byO.Kpto2.7Bp. 

For the half year ground rents 
and other property expenses 
accounted for 5159m (51.94m). 
There was a surplus of 5440,000 
(nil) on sales of dealing proper- 
ties and a contribution of 

5220.000 from the 50 per cent- 
owned Bride Hall Group from 
May 1. 

Other expenses took 594,000 
(563,000) and net interest pay- 
able 5774.000 (5442,900). The 
latter was after capitalising 

5621.000 into the cost of certain 
development properties. 

The company s developments 
under construction comprise 
over 400,000 sq ft. - 


Our current developments under construction comprise 
over 400,000 sq.ft, at Moorgate, EC2, Bloomsbury Street, WC1, 
Russell Street, WC2, Great Portland Street, Wl, and at the 
Weytwidge Business Park Demolition has commenced at 
Drury Lane, WC2, following planning permission for 1 7 flats, 
and the refurbishment of 8T Dean Street, W1 Is due to start next 
month. Since the 1 987 Report and Accounts, Centurion House, 
Hertford, has been acquired and contracts have been 
exchanged for the purchase of Buchanan House, Hofoom, EC4. 

Bride Hall Group Limited, in which we have a 50% 
interest is, with our support, extending its activities 
considerably. Recent acquisitions include Denison House, 
Vauxhall Bridge Road, SWT, 210 Euston Rood, NW1, and two 
properties in Fetter Lone, EC4. 

Richard Beslan - Chairman 


INTERIM RESULTS FOR 1987 


Unaudited revenue account Half-year Half-year 

1030.9.87 to 30.9.86 

rooo S' 000 


Net revenue before fax 


Net revenue after tax 


Earnings per share 


Interim Dividend 


12.058 10, 


Year to 
31.3.87 
£'000 


21,135 


7,961 6,883 14.000 


5.0p 4.5p 9.2p 


S J3 Z )' FT77 T r 


Great 

Portland 

Estates 

PROPERTY INVESTMENT 
AND DEVELOPMENT 

ForccopyollhB full Interim Report wte to the Secretary 


F inancial Times Thursday November 12 1987 

izrgszs? 

ISSUES OF G OVERNMENT STOCK 

as intScated of each of iha following Stock* 

CIOOmBBon 8 parcant TJBJWWJ 

SSS l£ a £££ ITOBC-IINKSD treasury STOCK. 202D 

ThepHca paid by tha8artc«n issue was in eatfi«»*en^te^wlmi 

price of the ratovant Stodc k 3.30 p.m. 00 IWi.ltownfoflr 1387 aa 

certified by foe GovanTOenLBroket ■ M ' 

riu^ num aga men L adCteonel amounts as mfocefadcfaech Of foe 

following Stocks: 

£150 mffioo 10 par cam TREASURY LOAN. 1994 
CIOOndBon 83 par cant TREASURY LOAN, 1997 
b each cate, the amount issued on 10th November 1S87 represent* o 
fertter^ncha of foe ntiavara Stock, ranking In 
with that Stodc and a&jad to the terms and « OBgtionB appBttblato 
tint Stodc; and subject also to the provwon **■ 

paragraph of ti* notice; tha current provisions for Capod Gara Tax on 
described beUt/t. 

AopScanon has been made to the Council of The In terra tiortaJ Stock 
Ex c hange for wfo fradfor tranche of stock to be admitted to the Oftoat 
list. 

Copies «f the prospectuses for 8 per cent Treaswy ' 

5th May 1987. 8S per cant Daasury Loan. 1397 dated I 3rd ! October 
1969,2) per cam Irwtex-UnkacTBeasury Stock. 2001 d4^20thAuguK 
1902 end 2} per cent Index-Linked Treasury Stock, 2020 datsd 12th 
October 1983 may be obtained at the Sank of England. New Issues, 
Wading Street. London EC4M 9AA. 

The Stocks are repayable, and Interest is payable hdf-yearty, on the 
dates shown below pn foe cases of 24 per cam Index-Linked Treasury 
Stock, 2001 and 2i per cent Index-Linked Treasury Stock . 2020 
p rovis i on ie made in the prospectuses for stockhddere to be offered 
the right of early redemption under certain circumstances}: 


Stock Redemption dan 

8 per cent Treasury Loan, 13th April 1992 
1992- 


Redemptian data hmrsst payment (fetus 

13th April 1992 13th April 

13th October 


83 per cent Traasufy Loan. 1st September 19S7 1st March 

InSanr* 


1st Stg n ember 

24 per cent Index-Linked - 24th September 24th March - 
Treasury Stock. 2001 2001 24ch September 

24 par com index-linked 16th April 2020 16th April 
Treasury Stock, 2020 16th October 

8 per cam Heesury Loan. 1992 and 83 per com Treasury Loan. 1997 
are repayable at par. 

Both the principal of and the interest on 23per cem Index-linked Treasury ; 
Stock, 2001 and 24 par cem Index-Linked Treasury Stock, 2020 are 
indexed to the General Index of Retail Prices. The Index, figure relevant 
to any month is that pubftshed seven months previously and relating to 
the month before the month of publication. The Index figure rel evan t to 
the month of issue of 2J percent Index -Linked Treasury Stock, 2001 is 
tint relating to December 1981 (308.8); the equivalent index figure for 
24 per cent Index-Linked Treasury Stock, 2020 is that relating to February 
1983 (327.3). These Index figures will be used for th& purposes of 
calculating payments of principal and interest due in respect of the 
relevant further tranches of stock: as provided for m the prospectuses, 
the calculations wiR take account of foe revision of the Index to a new 
base of January 1987 - 100 (on iha old base the Index for January 
1987 was 394.5). 

The relevant Index figures for foe half-yearly interest payments on 2i 
per cem Index-Linked Treasury Stock. 2001 and 24 per cem Index-Linked 
Treasury Stock.2020 are as follows: 


Interest payable 


September 

April 


Relevant Index figure 

Published in Rotating to . 

August of the previous year July: 

February of the same year January 

September of the previous August 

year 

March of the same year February . 


The further tranches of 8 per cem Treasury Loan. 1992, 83 per cant 
Treasury Loan. 1987. 2} percent Index-Linked Treasury Stock, 200 V 
and 2) per cent Index-Linked Treasury Stock. 2020 wB rank for a full 
she months* interest oii the next interest payment date applicable to the. 
relevant Stock. Official deafings in the Stocks on The Imematiqnal Slock i 
Exchange are expected to com m ence on Wednesday; 1 1th November 
1987. 

8 per cent Treasury Loon, 1992 wfflbe specified, and 83 per cam Treasury 
Loan; 1897, 23 per cem Index-Unked Treasury Stock, 2001 and 23 per 
cem Index-linked Treasury Stock. 2020 are specified, under paragraph 
1 of Schedule 2 to the Cspial Gains Tax Act 1979 ae gift-edged securities | 
(under current legislation exempt from tax on capital gtins, krespectiva 
of the period for which the Stocks are held). 

fS oeomin e nt etaavnent 

Attention is drawn to the statement issued by Her Majesty's Treasury 
on 29th May 1985 which explained foot. In the interest pf the orderly 
conduct of liscslpoflcy, neither Her Majesty's Government nor the Bank 
of England or their respective servants or agents undertake to disclose' 
tax ohanges deckfcd on but not yet announced, even where they may. 
specifically affect foe terms on which, nr the conditions under which, 
these further tranches of stock are issued or sold by or on behalf of the 
Government or the Bpnk; dm no reaponsibiBty can therefore be accepted 
for any orrasdon to make such disclosure; and that such amission shea 
neither render any t ran sa ction table to be set aside nor give rise to any 
daim for compensation. 

0AMC OF ENGLAND ■ - 

LONDON ' ' r; \ ■; '••• ' /. 

lOfo November 1987 


GEORGE H. SCHOLES PLC 


ATTHEHEAKTOFA 
SUCCESSFUL YEAR 


Himover 
Pre-tax profit 

Earnings per share 
Dividend per share 


31,977 
6,228 
31 -3p 
14-Dp 




WYLEX 

mm 


TOTAL 

.DIVIDEND 


Jj^CREASEP 1 ^ 

22 % 


ANOTHER SUCCESSFUL VEAR 
HIGHER PRODUOnCSsiMARGtNS 
WYLEX FOREMOST JN DOMESTIC 
SWITCHGEAR 

EXCITING FUTURE ,V - V - > 

gurrentyearstartsswEll •: 

NEW PRODUCTBfiSNGStfTRODUCED 
SIGNIRCANTCAPITAL EXPENDITURE 
PROGRAMME 

- ft. V HARRINGTON 

chairman 



- Vi 

'*^r, 

n • 

''‘'TkJi'n, 



















29 


Financial Times Thursday November 12 .1987 

UK COMPANY NEWS 


Acquisitions help lift 
Hazlewood to £13.9m 


BY PHILIP COGOAK 


the 


the help of a welter of acquiai- 
sofp 


Hazlewood Foods, 

acquisitive foods group. 

announced more than doubled 

interim pre-tax profits yesterday group launched a £53m one-for- 
after another active first half. six rights issue to help fund its 


tiozis ot private food manufactur- 
ing companies. In June, the 


The figures included a first* 
time contribution from Van Hey- 
n in gen Brothers, the tomato- 
growing company which Hazle- 
wood acquired for S9m - in 
November last year. Van Heynin- 
gen traditionally earns the lar- 
gest proportion of its profits in 
the summer months. 

The first half also saw a con- 
tinuation of the group’s expan- 
sion into Europe including the 
acquisitions of a smoked meat, 
manufacturer, a beansprout 
grower, a waffle baker and 50 
per cent of a frozen potato prod- 
ucts company. On an annualised 
basis, Europe now represents 
around 20 per cent of the group's 
turnover. 

Hazlewood has expanded rap- and minority 
idly over the past few years with £132,000 (nil), earnings . per 


acquisition programme- As a 
result, borrowings were elimi- 
nated although the tuning of the 
issue tneans that, the first half 
interest charge actually rose 
from £1.05fn to £3.0 &tl - 

The company also plans capi- 
tal expenditure of SlOm this 
- the major item? of expert- 
iture arethe water-bottling 

plant at Campsfe Spring, the » 
equipping of the Evesham fac- 
tory ana the loint venture in 
Roman (Delicatessen Products). 

Pre-tax profits for the six 
months to September 30 were 
£13.86m f£fl-36m) on turnover 
81 per cent higher at £ 153.8m 
(£8&xn> 

After of £3.74m (SL72m) 
rests of 


share were up 72 per cent to 
5.87p from an adjusted 3.42p. 
The interim dividend is being 
increased to 1.12Bp (lp). 

"comment 

Hazlewood has consistently 
produced outstanding figures 
and these are no exception; even 
after allowing for a £58m contri- 
bution from acquisitions, organic 
growth was not far short of 30 
per cent. Although the market 
crash will obviously put at Least 
a temporary brake on Hazle- 
wood *s acquisition spree, the 
group has made so many pur- 
chases that it has built-in growth 
for another three years. Chilled 
and frozen foods are likely to be 
the stars. - Assuming that full 
year profits reach £32m. the 
shares which rose IOp to 218p on 
yesterday's figures, are on a pro- 
spective p/e of 17. Although 
food is seen as a defensive sector 
in a bear market, that rating 
might put off cautious investors. 


Hanson Trust 


Hanson Trust, famed for its 
speedy shedding of unwanted 
assets, is to Streamline its name. 
If shareholders approve at a 
meeting on December 3, the con- 
glomerate will become known as 
Hanson PLC. 


Drayton Consd 


Net asset value per 25p share of 
Drayton Consolidated Trust 
was 713ftp ax the year end on 
September 30 1987 compared 
with 459p last time. 

The proposed final dividend is 
increased to 9p (8p), making 12p 
(10.75p) for the year. 


Crowthers in £3m deals 


BYAUCCRAWSTHORM 

Crowthers, the acquisitive 
carpets and. clothing group, is 
expanding within the founda- 
tionwear sector by acquiring two 
businesses. Ballet International 
and Arno Exports, from 
Arnotts, the retailing group, for 
£2JJ2m cash. 

When the acquisition is com- 
pleted, Crowthers intends to use 
the Ballet manufacturing plant 
in Dublin for. the production of 
its Pierre Cardin lingerie range 
and for the launch of a new 
high-faahion range of lingerie to 
be un veiled next spring. 

In the past two years, Crowth- 
ers has built up substantial inter- 


Public Works Loan Board rates 

Effective And 12 
OkM ions npMT Wan pW has A* >wH 


Ymt 


KyEiPt Aft mt|. WEi* 


Over lspto2_ 
Over 2 sp to 3 _ 
Over 3 ap to4 __ 
Over 4 op to S _ 
Over Sap to6__ 
Owr 6 *p to 7 _ 

Over 7 up to 8 

Over 8 op to 9 

Over 9 up to I0_ 
Over 10 op to 15. 
Over 15 op to 25. 
Over 25. 


8ft 

8ft 

8ft 

8ft 

8* 

8 * 

8ft 

8% 

8% 

8% 

9 

9ft 


m 

Wk 

Wk 

Wk 

Wk 

Wk 

Wk 

8 Vi 

8ft 

9 

9 

9ft 


’Non-quota, loans B are 1 percent 
i A t Equal instalments of priori; 
ity (fixed equ 


8ft 

8ft 

8ft 

8ft 

8ft 

8ft 

8ft 

8ft 

9 

9 

9 

9ft 

9ft 


9ft 

9ft 

9ft 

9ft 

8ft 

8ft 

9 

9 

9 

9ft 

9ft 

9ft 


9ft 

9ft 9 
9ft 9ft 
9ft ' 9ft 
9ft 9ft 
8ft 9 
9 9ft 
9 9ft 
9 . 9ft 
9 9ft 
9ft 9ft 
9ft 9ft 
9ft 9ft 


*Ni 
loans 

annuity (fixed equal half-yearly payments id include principal and inter- 
est). § With half-yearly payments or interest only. 


in each case ihtu non-quota 
tt Repayment by half-yearly 


ests in the carpets and clothing 
Industries through a whirl oT 
acquisitions. It has since ration- 
alised and restructured its cloth- 
ing businesses. 

Crowthers shares have suf- 
fered badly during the recent 
stock market crisis. The group 
does not envisage any further 
significant acquisitions in the 
UK. Instead it intends to expand 
overseas and to augment its 
interests with “niche’ takeovers 
like the purchase of Ballet and 
Amo Exports. 

poses to invest the 
le disposal into its 
core retailing business. 


Arnotts 


Equity Consort 
net assets rise 

Eqaity Consort Inv estment 
Trust reported net asset value 
per £1 ordinary share of 529p at 
lthe end of the. six months to 
October 31 1887 compared with 
467p. Net assets per 50p deferred 
i7p (734p). 


share were 85' 
The directors 


declared an 


(4.26p). Tax took £146,37? 
(£196^224) after which earnings 
per ordinary share fell from. 
llB8p to 10.12p and per deferred 
share from 17.76p to 14.26p. 


Ellis & 
Goldstein 
slips back 
to £lm 

By ASce Rawsthom 

ft Goldstein, manufac- 
turer »mf retailer of worn- 
enswear, - yesterday 
announced a fall in pre-tax 
profits from £lJSm to &ln 
for tbe first half of the 
financial year. 

The fall reflected the com- 
pany’s problems in develop- 
ing its new Jenni Barnes 
range of clothing and a new 
collection within the Kastex 
range. The company has 
also encountered problems 
in establishing its Daah lei- 
surewear range in the US. 

Mr Alan Philpott, chair- 
man, — that “gone 
have gone wrong for us, oth- 
ers have not gone as well as 
we would have wished”. But 
he stressed that E ft G had 
taken “corrective action” 
and that profits should 
start to recover next year. 

In the six months to 
August 1, external turnover 
rose to £38.4m (£ 86.6m). 
The problems with the new 
ventures reduced trading 
profits to 11.4m (11.7m). 
The company paid £375,000 
(£177,000) in interest and 
£347,000 (£681,000) in taxa- 
tion. 

RaruingB per share fell to 
2.4p ( 3 - 32 p). The board 
declared an unchanged 
interim dividend of OJlp. 

The Dereta range per- 
formed reasonably well, as 
did Dash in the UK, where it 
encompasses 127 conces- 
sions and 24 shops (inclnd- 
ing franchises). But Dash 
has run into problems in the 
.US, where it has opened 
three shops in the past 
year. 

E 8b G was now rationalis- 
ing the concessions for its 
Eastex label In preparation 
for the launch of. a new, 
more stylish look next 
spring. A new Eastex collec- 
tion, gf, which was intro- 
duced a year ago, was being 
withdrawn. 

The company was also 
experiencing difficulties 
with Jenni Barnes, a new 
range for working women 
launched 18 months ago. 
The number of Jenni Barnes 
concessions has been 
reduced - from the original 
160 to 40 by next spring - 
and the range was being 
redirected towards a youn- 
ger market. 

E A G has appointed Mr 
Peter Home, from Thom- 
EMt, as its flnancs d i rect o r. 


LAND SECURITIES PLC 

INTERIM RESULTS 




Year to 
3L3.87 
(audited) 


30,9-87 

(unaudited) 

30.9.86 

(unaudited) 

Cm 

175.8 

Rental income 

£'m 

96.5 

Cm 

85.2 

204.1 

Total income 

118.6 

97.6 

164.0 

Net rents and interest receivable 

97.4 

77.9 

43.4 

Interest payable 

32.9 

19.8 

120.6 

Income before taxation 

64.5 

58.1 


I The income before taxation for die second half of the year to 31st March 

K 1988 is not expected to differ materially from that of the half year to 

p 30th September 1987. 

| An interim dividend has been declared of 3.65p per share (1986: 325p) 

| which with the related tax credit is equivalent to 5p (1986: 4.577p). 

Good progress is being made on our active development programme of offices in 
Central London and at retail sites around the country. 

Mew office projects involve buildings of various sizes, each well situated and giving a 
spread of location without relying on any particular sector of tenant demand. Work has 
started on two City office buildings totalling over 300,000 sq. ft. and these are under 
offer to prospective tenants. A start is planned between January and June 1988 on a 
further 700,000 sq. ft. in the Qty, West End and Victoria. 

Construction is under way on one of three major new covered shopping centres. The 
shopping centre refurbishment programme progresses welL Our retail warehouse 
portfolio now approaches a potential 4m sq. ft. 

Active portfolio management continues, inducting buying in leases for 
redevelopment, refurbishment and reletting. We shall continue to seek acquisitions and 
future developments as and when appropriate opportunities arise. 

Cash resources are sufficient to fund the current development programme. 

Borrowings exceed £900m, over two thirds of which is not repayable until 2007 or later. 

A leaflet setting out the Interim Results and comments in more detail has been despatched to the 
Shareholders. A copy may be obtained from The Secretary, 

LAND SECURITIES PLC, Landsec House, 21 New Fetter Lane, London EC4P 4PY 









■B SMITHS INDUSTRIES 


PRODUCTS AND SYSTEMS TOR 
TOE AEROSPACE. MEDICAL 
AND INDUSTRIAL MARKETS 

■ Profit up 

■ Earnings per share up 

■ Dividend up 

■ Good prospects 



1987 

1986 

Turnover 

£429.9m 

£401 .2m* 

Profit before Tax 

£65.7m 

£56J>m 

Earnings per Share 

19.4p 

16.4p 

Dividend per Share 

6.5p 

5J5p 


♦continuing businesses 

“Prospects including those for our recent North 
American aerospace acquisition are encouraging 
and my confidence for profits growth in 1987/88 
and beyond Is high.” 

F. Roger Hum Chief Executive & Managing Director 




Nana, 


Company. 

Address.. 


Position. 


JTbLNo.. 


FT 




business in Denmark needs the touch of 
an entrepreneur 

| of businessmen 

courageously elected 
a 27 year old as 
managing director 
of the newly estab- 
lished Privatbanken. 

It was an inspired choice 
For Carl Tietgen founded 
not just a bank but many of 
Denmark's most important 
domestic and international 
companies as well. 

Today this spirit of youth- 
ful enterprise and mature 
problem solving still serves a 
growing domestic and 
international client list 
These roots have 
allowed us to make 
some dramatic 
advances over the 
last 25 years. 

During the 1960's 
we formed our strategic 
correspondent network 
The 1970's saw the 
birth of our global 
network of wholly-owned 
subsidiaries. 

And in the 80’s we 
expanded our domestic 
services by joining forces 
with the Scandinavian 
Banking Partnership. 

This rapid growth 
and success may well 
surprise you. 

It shouldn’t 

It certainly wouldn’t surprise 

Carl Tietgen. 

PRIVATbanken 

Denmark • Scandinavia * The World 

COPENHAGBfl • STOCKHOLM ■ HELSNN ■ OSU3 • LONDON ■ fWHS - BERMUDA ■ CAYMAN ISLANDS ■ SflO RMJlO - NEW YORK ■ IDS ANGELES ■ MADRID ■ FUENGIROLA 
HAM3URG ■ LUXEMBOURG ■ ZURCH - GENEVA ■ MILAN ■ MONACO ■ MOSCOW - TOKYO ■ TEHRAN - BAHRAIN - HONG KONG • SINGAPORE ■ SYDNEY 
HH| SCANDINAVIAN BANKING PARTNERS BarganBar^HiwnrmSESanlmumBMtf Fwand 



L. .. 


1 






Financial Times Thursday November 12 1987 


30 


Electronic Memories International N.V. 

I 3,500,000 

V /2 per cent. Subordinated Guaranteed Convertible Bonds 1988 
NOTICE OF PARTIAL REDEMPTION 

S.G. Warburg it Co. Ltd. announce that the redemption instalment of US$1^50.000due 15th December. 1987 has been met by purchases 
in the market to the nominal value of US*68»Q00 and by a drawing of Bonds to the nominal value of USS1 ,282,000. 

Hie distinctive numbers of the Bonds, drawn in the presence of a Notary Public, are as follows^ 


i 

1202 

n# 

1791 

2082 

zm 

288+ 

3146 

3H9” 

+239 

4901 

W8 

6M] 

”232 

794” 

H4H3 

H6+J 

JT2S 

JC6+ 

HUSH 

mo 

8997 

TOM 

9072 

9109 

9186 

924? 

9368 

9*26 

9794 


3 

1*3 

n« 

rv# 

2084 
29 U 
2HH8 
3 >48 
3900 
4244 
814J 

•vm 

f»S+H 

7418 

*023 

»4tW 

S661 

K727 

8766 

mo 

6932 

uaaa 

*1777 

9036 

9074 

9111 

9IKR 

9K0 

9371 

9128 

r« 


•» 

IjMo 

I7Q” 

1798 

2086 

2M5 

2891 

5140 

«W 

4295 

616! 

619H 

6678 

"446 

8099 

JHK7 

ms 

8729 

8769 

8862 

9001 
9038 
9076 
9113 
9190 
92 62 
»73 
9431 
9798 


1384 

I”2J 

17?7 

2089 

239! 

2W3 

3162 

4069 

4267 

6414 

6241 

MBO 

7448 

8137 

H6~4 

8731 
8824 
8RW 
8977 
9003 
9040 
9078 
91 16 
9ITO 
9264 
9376 
9443 
9980 


9 

«*> 

1726 

1”99 

2091 

1JQU 

2W6 

3>«0 

4103 

4448 

6416 

631K 

6689 

7693 

8139 

8648 

8679 

H-34 

«R2ft 

HHbb 

8963 

9006 

9042 

9080 

91 r 

9201 

9266 

957? 

9*36 

9982 


21 

1388 

172? 

1801 

209” 

2416 

2916 

327? 

4112 

4460 

6637 

6320 

MM 

" r '”4 

8141 

8601 

8690 

U7.V6 

8H2R 

8868 

896” 

9007 

90*4 

9082 

9119 

9203 

9268 

9379 

9441 

9984 


10208 10287 

10650 


10289 10300 103 16 10318 


10936 

11124 


10666 10602 106~6 I06”8 
10958 10940 11031 IHfctt 


1J06 

1T9 

1803 

2099 

2661 

2931 

32-9 

4114 

-M62 

6639 

6323 

6767 

7TU 
8 1 "6 
860b 

W09 

R”38 

8831 

8jro 

8969 

9009 

90*6 

9WH 

9121 

9206 

9260 

9381 

9M3 

9986 

10320 


111 

1399 

1731 

1806 

2101 

2663 

2933 

3368 

4131 

4464 

564! 

6326 

tr-6 

7KI- 

8n3 

8609 

»P01 

K”40 

8833 

8901 

8972 

9011 

904« 

9086 

9125 

9210 

9262 

93*5 

9446 

9988 


139 

2 -MU 

1733 

1824 

2103 

2760 

2935 

3420 

4133 

4466 

6643 

6363 

6814 

7866 

H216 

861! 

m* 

1T42 

8H36 

8903 

«9”6 

9013 

9060 

9088 

9127 

9212 

926* 

9386 

944” 

9990 


10bH8 10690 


10322 10324 

10692 10826 


626 
1406 

1737 
1904 
2109 
2805 
3011 
3473 
4138 
+*70 
6652 
6304 
6828 
7861 
8229 
8616 
8708 
1Ti7 
SH42 
8911 

8979 
9017 
9066 
9092 
9131 
9222 
9268 
9389 
9451 
9994 

1036? 10369 10371 
10827 10829 10831 


230 

1404 

1735 

1882 

2107 

2781 

2993 

3+61 

+136 

4468 

55*6 

6366 

6816 

T*6” 

8218 

8614 

in* 

8"4S 

8840 

K905 

8977 

9016 

9062 

9090 

9129 

9218 

9266 

9387 

9449 

9992 


628 

1408 

1739 

190B 

2111 

2829 

3026 

3601 

4140 

+T2 

5654 

6396 

6830 

7863 

8235 

8618 

8710 

8750 

8844 

8913 

8983 

9019 

9057 

9094 

9133 

9226 

9270 

9391 

9453 

9996 


630 

1410 

1741 

1910 

2113 

2831 

3038 

3571 

4142 

44-M 

5656 

63TO 

7097 

7866 

8397 

8620 

8-12 

8752 

8846 

8917 

8986 

9022 

9069 

9096 

9136 

9228 

9272 

9393 

9487 

9998 

103-3 


635 

1663 

1782 

1920 

21.41 

2840 

3129 

3673 


680 

1665 

1786 

2029 

2139 

2843 

3135 

3825 


633 
1563 
1743 
1912 
2115 
2834 
3071 
3641 
4144 
4565 
6658 
6400 
”107 
7H81 
*404 
8628 
8714 
*754 

oaifl 

| 4/ 14# 

8919 
8987 
9024 
9062 
9098 
9175 
9230 

92”4 
9395 
9489 

KXPS 10083 10114 


+172 4209 
4608 4768 
5660 5818 
*402 6532 
7114 ”116 
7S84 7902 
8425 *477 
8630 8632 

ITl6 ‘ 8718 
8756 *758 
8850 8862 
8921 8923 

Boon qqqi 
nw w77I 

9026 9028 
9064 9066 
9101 9103 
9177 9I8O 
92 33 9236 
9276 9278 
9403 W05 

Qftt oOtJZ 
J033 7W 


1124 

1680 

17H7 

2078 

2206 

2853 

3139 

38T7 

4211 

4770 

5820 

6534 

713+ 

7923 

8479 

UiUi 

Wyt 

*720 

8760 

8854 

8925 

8993 

9030 

9068 

9105 

9182 

9238 

9285 

9407 

9745 


1188 

1693 

1789 

2080 

2208 

3*67 

3141 

3879 

4237 

4899 

5B29 

6536 

7180 

7925 

8481 

*642 

{T22 

8762 

8*56 

892* 

8995 

9032 

90*) 

9107 

918+ 

9245 

9364 

9410 

9791 


10118 10120 


10833 10909 


10387 10389 10407 10486 10542 


110*7 1 1049 1 HT0 1 1082 1 10*1 1 1086 11088 1 1092 11101 


11126 


112*9 11291 


11147 11185 1UK” 
11293 11295 1129* 


11422 11*29 11455 11457 

11714 


11189 
1 1300 
11466 11481 


11776 


11697 11699 11711 

11”6* 11770 11772 11774 

1)841 118+3 11845 11847 URS4 

11906 11908 11910 11912 11914 

11960 11962 11965 1196* 11970 

12001 12003 


11463 

11716 11”1B ll“2t 

1177* 11784 

11*75 

11916 
119-2 


11196 11221 

11302 11326 


11231 11233 11235 11249 11251 


10911 

11103 


10932 10934 


11723 H”25 

ll”»J 11801 


10913 

11105 11117 11122 

11263 11265 11267 11269 11287 

11365 11418 11420 

. . 11691 

11729 11746 11748 11750 11754 11756 


113*2 113+4 11344 11357 11359 11361 11363 

1149” 1 1510 1 166? 1 (669 11671 1 1675 11677 1 1689 


11-7” 

11803 11805 11807 11809 


11693 11695 

11761 11766 


11811 11813 11815 11817 11819 


11877 11879 118*2 11884 118*6 J1888 11890 11896 11898 11900 11902 11904 

11918 11920 11938 119*0 11942 119+4 11948 11950 11952 1195+ 11956 11958 

... _ . . _ 119?+ 11976 119”* 11963 11985 11987 11989 11991 11993 11995 11997 11999 

12005 12007 12009 120 It 12013 12015 1201” 12019 12022 12024 12026 12028 IZOflO 12032 12034 12036 

12038 12040 12042 1204+ 120+6 12048 12050 1205? 12059 1206! 12063 12066 12068 12070 12072 12074 12076 12078 

12080 120R2 120*4 120*6 12088 12090 12092 12094 12096 12098 12100 12102 12105 12107 12109 12111 12113 12115 

12123 12125 12127 12129 12131 12133 12135 12137 12139 121+1 121+4 12146 12148 12150 12154 

12164 12166 12168 I2i”0 I21”2 121”+ 121”6 12178 12180 L2182 12188 1219J 12\95 12195 12197 


121)7 12119 12121 
12156 12160 12162 

12199 12201 12205 12207 12209 12211 12213 12215 12217 12219 12221 12223 12225 12227 12230 12232 


12238 

12275 


12240 12242 1Z2+4 12246 122+8 12250 12252 1225+ 12256 12258 12260 

12281 12283 12285 12287 12289 12291 12293 12295 12297 12299 12301 


12262 12264 12266 12269 

12303 12305 12307 12309 12319 12321 


12234 12236 

12271 12273 


12323 12325 12527 1233+ 1 2336 12338 12340 123+2 125+4 12346 123+8 12350 12352 12354 12356 12358 12360 12363 


12369 12374 12387 123*9 12391 12393 12395 1239? 12399 12401 12403 12405 12407 12409 12411 12413 12415 

12427 12429 12431 12433 12435 12437 12+39 124+T 12443 12445 12447 12449 12454 12456 12489 12496 12498 

12536 12538 12540 12542 1254+ • 12546 12548 12550 12552 12554 12556 12558 12560 12572 


12367 
12425 

12500 12513 12515 12531 

>2574 12576 12579 2293! 12583 22585 2259 2 12595 2259? 12599 12602 12604 12606 12606 12610 12612 

12628 12W0 12623 12625 12627 12629 12631 12633 12635 12637 12639 12641 126+3 12645 12647 12649 


12655 


12664 


12657 12659 12662 

12698 127IJ0 127Q2 12704 12707 12709 12711 

I 2736 12738 127+0 12745 12747 12753 »2?55 


12666 12668 126?0 126?4 12676 

12713 12715 12717 


12614 12616 

_ 12651 12653 

12678 12680 12682 12688 12690 12692 12694 12696 

12719 12722 12724 12726 12728 12730 12732 12734 


1275” 12759 12782 12764 12767 12782 12784 12757 J2805 12807 12809 


12812 12814 12816 12818 12820 12822 12825 128Z7 12829 12831 12833 12835 12837 12839 12841 12843 12845 12847 


12852 

12891 


128+4 12856 12858 12860 12862 
12893 12895 12897 12899 12901 


12864 12869 12871 12873 12875 12877 12879 12881 12883 12885 12887 12889 

12903 12905 12908 12910 12912 12914 12916 12918 12920 12922 12938 12940 


12947 12949 12971 12973 12975 12977 129”9 12981 12984 12966 12988 12990 12992 12994 12996 12998 13000 13002 

13004 13011 13013 13015 13017 13019 13021 13023 13025 13028 13030 13037 13039 13056 13058 13060 13092 13097 

13099 13102 13104 13131 13133 13135 1313” 13139 13146 13148 13161 131© 13165 13171 13173 ‘13175 13177 13182 

13184 131*6 13188 131TO 13198 13200 13203 13205 13207 13209 13211 13214 13216 13218 13220 13222 13224 13229 

13234 13236 13238 13240 13242 13244 132*6 132*8 13250 13252 13254 13256 13259 13261 13263 1326 5 13267 73269 

13271 13273 13275 13277 13279 13281 l]26 13285 13297 1329? 13301 13303 13305 13308 13310 13312 13314 13316 

13318 13321 13323 13325 13327 13329 13331 13333 13336 13338 13340 13342 13344 133+6 13349 13351 13553 13355 

1335? 13359 13361 13363 13365 13367 13369 133”1 133?3 13375 !33”7 13379 13381 13383 13391 13393 13395 13401 

13403 13405 13+07 13+09 13416 13+18 13420 13422 13+24 13426 13428 13430 13435 13437 13439 13+42 13+44 • 134+6 

13448 13450 13452 13+54 13456 13458 13460 13462 13464 13466 1346B 13470 13472 13482 13484 13486 13489 13491 

13493 13+95 1349? 13+99 

On 15th December, 1987 there win become due and payable upon each Bond drawn for redemption, the principal amount thereof; 
together with accrued Interest to said date ar the office ofi- 

S.G. Warburg & Co. Ltd. 

Paying Agency, 6th Floor, 1 Finsbury Avenue, London EC2M 2PA 

or one of the ocher paying agents named on the Bonds. 

Interest will cease to accrue on the Bonds called for redemption on and after 15th December, 1987 and Bonds so presented for payment 
should have attached all Coupons maturing after that date: 

The amount of any missing unmanned Coupons will be deducted from the sum due for payment Any amount of principal so deducted 
will be paid against surrender of the relative missing Coupons within six years from the date of payment. Bonds wiU become void unless 
presented within six years of the redemption date. 

US$1,350,000 nominal amount of Bonds will remain outstanding after 1 5th December, 1987. 

12tb November, 1987 


De La Rue 
Strategy 
Paying Off 

The results for the first six months hove borne out the Board's confidence in the 
good prospects for the current year. The acquisitions made last year are now fully 
integrated and are contributing to an important and increasing degree to the growth 
of both sales and profits, 

Peter Orchard CBE Chairman 


INTERIM RESULTS 



1987 

1986 

increase 

Turnover 

£224m 

£l80m 

24% 

Profit before tax 

£21. 6m 

£l7.9m 

20% 

Earnings per share 

10.7p 

9.1P 

18% 

Dividend per share 

3.25p 

2.75p 

18% 


PRODUCTS AND SERVICES 

• Security printing 

• Security printing equipment 
» Cash and payments systems 

• Credit card processing 

• Remote security and control systems 


i Electronic pre-press equipment 

> Newspaper systems 

• Automated fingerprint identification systems 

► Identity cards and systems 


MJ The De La Rue Co p.l.c 


AeopyofrfwinJ6nmanfiauncEnienlisavai]QbJeyKnnTheSecretDry.Th0D0LaRuBConipaiiypL&,D8liaR>MHOTS8 1 3/5BudiagtoiiCanieos, 

Louden WlA 1 BL Td: 01-734 8020 


UK COMPANY NEWS 


Optimistic Smiths tops £65m 


BY DAVID WALLER 

Smiths Industries, the aao*. 
space and medical systems com- 
pany which this summer bought 
the avionics division of Lear £ie~ 
gler Holdings for $850m 
(Si 97m), yesterday announced a 
16.2 per cent increase in pre-tax 
profits far the year to August 1. 

At £65.7m, taxable profits 
were just ahead of the compa- 
ny's forecast made at the time of 
the acquisition. The shares 
responded strongly, having 
taken a severe battering in 
recent weeks due to Smiths per- 
ceived exposure to the US econ- 
omy. 

Mr Roger Hum, chief execu- 
tive, sounded an optimistic note 
for the current year and pre- 
dicted that there would be no 


earning dilution as a result of 
the acquisition of the Lear Sge- 
gler. businesses, which made no 
contribution to the 1986-87 fig- 
ures. 

Interest income rose more 
than four times to' 58.45m 
(£0.$4m), reflecting the com- 
pany's strong cash-generation 
during the year, from both trad- 
ing and asset disposals. At the 
year-end, net cash and short 
term investments were 554.7m 
(£20. 6m). Earnings per share 
were 18 per cent ahead at lfi.4p 
and a final dividend of 4.5p 


Aerospace generated * 15.4 per 
cent rise in trading 'profits, to 
£27. 16m on turnover of 
&189.05 kl Medical systems, the 


other core division, mustered a 
' 17 per cent profits increase to 
£20, 46m on sales of £100. lm. 

The lower margin industrial 
division showed a slight decline 
in profits to £1 1.97m, reflecting 
problems at two US subsidiaries, 
SI-Tex Marine and Aero Electric 
Connector. 

. "comment 

- Thought to be a smart move 
back in August, Smith Indus- 
tries' acquisition of Lear Siegler 
Avionics has been the death of- 
the company’s share price, 
which in the last few weeks has 
fallen to below halfits high for 
the year. Clearly, increased expo- 
sure to the US 'economy, and 
worst of all, the aoon-to-be- 


lopped defence budget, is per- 
ceived by the market to be no 
good thing. Investors are worried 
that the anticipated improve- 
ment in trading margins at Lear 
Siegler - which were 82 per cent 
in 1986 against 14.7 par cent in 

Smiths' aerospace business - will 
be wiped out by the falling dol- 
lar. Certainly the company’s 
practice of translating profits at 
year-end exchange rates makes 
predictions for the currentyear 
fuzzy round the edges at £92m- 

595m. ^ j ow dollar will 

help retrofit exports from the US 
.to the Third World, and the 
shares seem oversold on a pro- 
spective p/e of Sit 


Blacks back into profit with £437,000 


BYtBKXlTAIT 

Blacks Leisure, file camping 
and leisurewear company which 
was saved from receivership by a 
£lm consortium package last 
October, yesterday celebrated the 
anniversary of its survival by 
announcing its first profit since 
2983. 

Yesterday Mr Bernard Garbacz, 
the chairman and chief execu- 
tive of the group who led the 
original rescue, said that he was 
“delighted at the way things are 
going." 

In the six months to the end of 
August, the company made a 
pre-tax profit of £437,000 on 
sales of £9.9m. 

Because of tax losses available 
in certain Blades companies, the 
tax charge in the first half was 
just £92,000 and there was an 
extraordinary surplus of 
£223,000 - a write-back of pay* 
over-provision for rationalisation, 
costs. Attributable profits, there- 
fore, totalled £568,000. 


.Rationalisation of the core 
chain was largely , complete, and 
he added that the company was 
‘hopeful’ of paying a final divi- 
dend following its capital recon- 
struction, approved this week. 

•comment 

It is an unfortunate Irony that 
while Blades shareholders were 
backing the company on blind 
faith - or speculative greed - the 
price soared away to over 50k 
now that some fundamental evi- 
dence of the new management’s 
strategy has emerged, it is lan- 
guishing at 19p (despite a 2%p 
rise yesterday). Byt at least those 
who didn’t cut and -run can now 
make a sensible assessment. The 
company has warranted profits 
from most of Its acquistions 
totalling 52.4m for 1967/8; Miss 
Sam made £ 1.27 m in die first 
half of 1986/7, and wfD shortly 
report full-year figures to Sep- 
tember; on top of that, thou la 
the core Blacks contribution (tra- 


ditionally better in the Christ- institutional support. Moreover, 
mas hall). In abort, S&n-plus for while the net asset base, remains 

ss^srsMiis 

% atif.jssEMft F r m , thKe r,gu r- 

these markets ' but no longer Blades has clearly come a long 
stratospheric - and a return to way in a year - but then so has 
the dividend llst could encourage the market. 


Doubled profit 
at Phoenix 

Phoenix Properties St 
Finance, which acquired Rohan, 
Irish property developer and 
construction group, in July, 
mon than doubled protax prof- 
its from £l.lm to £2£2m in the 
nine months to September 30 
1987. 

Turnover increased from 
£17.48m to £19.21 in and earn- 
ings per 26p share worked out at 
5.47 d (3.15p) after tax of 
£689fo00 (£165,000). All figures 
and comparisons are on a merger 
accounting basis. Phoenix’s own 
pre-tax profit for 1986, prior Vo 
the acquisition, was £115,998 
and turnover amounted to 
£3. 16m. 


Wade Potteries 
rises to £2.3m 

Wade Potteries, manufacturer 

of ceramic products, lifted tax- 

able profits from £l.67m to 
£22 2m on turnover ahead horn 

£1738m at £1 8.47m for the year! 

ended July 31 1987. 

The directors proposed a final! 
dividend of 3p (2 4p\ making 
total of 4.35p (35 p) lor the year. 1 . 
After tax of £304,623 (&670.502)j 

earnings per lOp ordinary share) 

were shown as 1-L38p(10.36p\ 
The directors added that uu 
had been a slow start in some! 
areas but demand was now! 
improving and the company 
looked forward to a reasonably! 

encouraging outcome for the cnr-| 

rent year. . 


BOARD MEETINGS 


IM noOtod driM Of Be 


Tba tofcwtoo compart** . _ 

bold nan> to am Stock rj& l w i gw such 

— uaua+y bold tot too pupoaa of 

...Hand*. QftcM IrKScanona no not . 

■vstttto as lo MMCwr Dw cMdanda » Martm* • 
o fjnaa *r>d too ■utxfeiskms tfnwn Mo* are 
tMaodmoMyanlMtyMf'i bmtobirt. 

TODAY 

Intorirw- /print Compute™, Bark of MUndL Lon- 
don buomofl m rt. CMmd I wt i u r nn i l o. a Srat 
Isntw p O i hw— l. Sfrvrt y Muatros, Ttmnos 
Taimtfan. Ik R*k Y«So and Volar. 

HntftoUOC On« May. kU. Gfaeeoa 
ASmOc. Watoom. 

FUTURE DATBS 


Baratov Gtoi+j 

Bortona International 


Down tons 

Kino mtl Sh*x*Mi 

notnmme vitomvDona 
Snath St Aubyn 

3s tr 

Burton Group 


Clyde Stowera 

Dundea and Lontai 

investment true) — 

Gown Atlantic. 


BET: 


North treatment Trust - — 

Htod a ngaf Prcpa rtto a . 
HacBiny. 


Nov 23 Roaote 


Dec 8 
Nov K 
Nov 20 
Nov K 
Nor 26 
Nov T9 
Nov 16 

Nov 19 
Nov 1G 

Dec 1 

Nov 20 

Nov 17 
Dee 17 
Nov IS 



Gdtabanken 

(Incorporated bi the Kingdom of Sweden vah lanital hxbility) 

U.S. $50,000,000 

Floating Rate Capital Notes due 1994 

In accordance with the provisions of the Notes, notice is hereby 
riven that die Rase of interest for the Period 13th November; 
1 987 Co 1 3dt May; 1988 bad been fixed at 74i% per jnnum. 

The Co u pon Amount in raped of LIS. 510,000 nominal of the 
Nora wifi be US- 5385.49. 

The Interest ftjmcnr Dare will be Z3di Maj; 1988. 

Agent Bank 

- ft atrmv -1 Mfmt ugn Hr <~Vv_ TJmitvd 


^NOMURA 


Nomura Intemstaonsil Finance pic 
is pleased to announce that from 
1 2th November, 1 987 it will be trading as: 

Nomura Bank International pic 


Nomura Bank International pic - 

Nomura House. 24 Monument Street. London EC3R &AJ, United! Kingdom 
General Tel: CCX1 > S29 2366 Telex: 941 3063/4/5/6 CABLES NHl LONDON 
NBlFX LONDON Fax: COD 626 0851 COrOUp 2/3> 

Reuters Dealing Codes: NIFL: Spot Fx. NIFX: Forward Fx, NOML DeposHas/FRAs 

Telex: 9413065/6 NE31 


— r v 



V 








31 



Hnandil Tames Thursday November 121987 




TECHNOLOGY 


A RE THElapanw** gearing up for 
another tssault on the European 
and Noth American machine 
tool makets? Yes they are, say 
many European machine mak- 
ers. And they believe they know where the 
attacks will come hom- , . 

For years- the Japanese have relied on. 
their excellent machine tool capability to 
make products aid components at manu- 
facturing costs agtinst which the West has 
found it tough to crnpete. 

Japan .will not ,-ede this advantage easily 
and looks set. to mount a new challenge in 
three areas of the machine tool market. 
These are prediction machinery for vehicle 
thudding, atantard computer numerdally- 
controlled mtchinlng centres and lathes 
assembled at darns outside Japan, and spe- 
cialist machines. 

This third, area is one where until now . 
the Japanes; have not directed much of 
* their energy But innovation arid the devel- 
opment of rew technology in this sector of 
the industp will play a key role in their 
renewed stack on the machine tool mar- 
ket. 

That the^> is still a commitment in Japan 
to spendbg big money .on machine devel- 
opment vas .‘demonstrated at last month's. 
Eu ropeai machine tool show'' in Milan 
where Yimazafci. a family-owned machine' 
tool business,' appeared with a grinding 
machine' for ceramic components. It is 
claimed to be - the first computerised 
ceramic machining system. 

The machine, which, in a sense, manufac- 
tures part o' its own ‘tooling’ is also 
claimed to be fast, capable of carrying out 
rough and flrished grinding, and is suitable 
for mass praeuction. 

This rnadine will provide the opportu- 
nity for taking ceramics out of the labora- 
tory and Into the workshop," says Les Pratt, 
YamazaJd's narketing manager £or Europe. 

The view mch advanced machining capa- 
bility gives, of the likely" direction ofJapa; 
nese machine tool development comes 
against a • Background where -for the last 
year or so the country's industry has been ' 
bemoaning its .’ate. Japan may be the. 
world's biggest nachine toed maker, but 
many of its largest companies- have been 
racking up losses 

The voluntary restraint accord with the 
US, signed at 'he end of last year, cut 
Japanese machite tool exports to North 
America, the world's largest machine toed 
market. Buffetd by the value of the yen, 
Japanese machhe exports to the EC appear 
to have slump'd by as much as 30 per cent 
in the first hdf of this year. As a sign of 
the times, Marino Milling announced this 
week its first naif year kes since listing its 
shares in 196<. 

Most of Ja»n‘s European machine tool 
competitors Relieve this is just a temporary 
lapse. Japan more than any other nation, 
with the posible exception of West Ger- 
many. recognises the strategic significance 
of the machne toed Industry. ' - 
The Euroiearvs see a major threat coming' 
from the Alienees being formed between 
Japan's car manufacturers and their Inter- 
national ompedtore. Japanese car compa- 
nies, somejof which have their own, and 
very largd. machine tool divisions, now 
have something like 16 separate manufac- 
turing ageements with European and 
North American car builders. 

General Rotors has deals with Toyota, 
Isuzu. Nissan is linked with 
and Motor Iberica of Spain, 
r is tied up with Mitsubishi, 
>Benz in van buQding. Mazda 
with Ford, Honda with the 
rp and Sozuld with Land Rover 
dhaisu H due to sign a deal soon 
~i car Industry. ■ 

In all \hese amusements, Japanese car 



Pumping new life 
into the heart 



Nick Garnett examines a three-pronged 
move to retain machine tool dominance 


companies either lave joint- manufacturing 
arrangements or are supplying vehicles 
which are bodged as North American or 
European. 

The machine tool divisions of the Japa- 
nese car companies manufacture a range of 
equipment for car plants, including transfer 
lines and special machinery for engine 
components. 

West German and US machine tool build- 
ers are the world's biggest suppliers of this 
type of machinery and, in many areas, 
have a technological advantage over the 
Japanese. 

It seems, though, as if the Japanese will 
use their Increasingly powerful grip on the 
world's motor industry as a law 
to try and obtain control over car 
machine technology and markets. 

This promises to be a tremendous battle 


with German and US machine makers, one 
which shows signs of breaking out already 
in Korea where both German and Japanese 
technology is used on car production lines. 

At the same time, the Japanese are rap- 
idly extending tbeii- machine building capa- 
bilities in North America and Europe- 
Opening assembly plants in the US has 
been a theme of their strategy for the past 
five years or so, and they are now transfer- 
ring this philosophy to Europe. 

In the past year, Amada has purchased 
Promecain Sisson- Lehman in France and 
will begin making presses and shearing 
equipment there. Mitsui Sefld is building a 
facility outside Paris to make machining 
centres. Mori Seda is discussing with the 
French government the possibility of set- 

near Paris 
arm of 


ting iro a production facility neai 
while Toyoda, the machine bunding 


COMMITTED TO 
GROWTH INTHEGCC 



r ^mw ikiwnt _ the driving force behind the spirit of enterprise at 
Gulf Investment evaporation.; 

Commitment to : assisting the diversification and expansion or the 
economies of the Gulf Co-operation Council (GCC) countries. 

r Ammbnient ip the initiation of a new generation of vital Industries 
and services in the region. _ 

Com mitm e nt to the active encouragement of investment by the 
private sector as partners in join* venture projects. 

Two' management groups spearhead this thrust — Projects Group, 
dedicated to the identification and evaluation of viable direct investment 
opportunities, and Finance Group, embracing corporate finance, portfolio 
mana g e m ent and treasury, and concentrating, among other things, on the 
promotion and development of regional capital market activities. A key 
fector in the strategy of success for both Groups is the stimulation of privae 
sector investment, both by encouraging direct participation in Gulf 
investment Corporation's various ventures and supporting the expansion 
of local stock market activities to promote wider private involvement in the 
economic development of the region. 

Gulf Investment Corporation, equally owned by the member states of 
the GCC, brings to bear a unique combination of experience, vision and 
resources to achieve the twin aims of growth and prosperity for the region. 
fA mmbiiMw>t — more than Just a word, here. More a way of life. 

GULF INVESTMENT CORPORATION 

The new shape of investment in the Gulf 

P.O. Buk 5402. Sa& t 13035, Kuwaft • Coinimjoirt BmkingCgXre. Kuwait fcai gsate Balk BiASng. Kuwak w 
(96S) 243191 1 • Tdcto (496) 44002/23146 G1CQRP KT • Telefiat (965) 2448894 • Ofafa GfOORP* 



Toyota has taken majority control of 
Emault-Toyoda, a machining centre and 
lathe producer. 

Outside France, Maklno this year 
increased its stake from 60 to 86 per cent in 
Heldenrefch and Harbeck which makes 
MaMno-designed machining centres in West 
Germany, xaxnazald alw ) on stream 
with its £35m facility at Worcester, 
England, producing ladies and machining 
centres. 

These plants will help the Japanese over 
come some of the problems of the revalued 
yea. They will also put them closer to their 
European customers, an increasingly 
important requirement In selling machin- 
ing systems made up of linked machines in 
so-called "cells.* 

Yamazald’s move Into the field of ceram- 
ics is indicative of the importance being 
attached by the Japanese manufacturers to 
machine tools for the motor industry. The 
materials are under test for applications in 
car and truck engines. For example, Nissan 
displayed a ceramic-engined car at the 
recent Tokyo motor show. In addition 
ceramics already have a tentative foothold 
in the aerospace and pump seals industries. 

Made by firing compressed powders, 
ceramics are hard materials, very resistant 
to wear, high temperatures ana. chemical 
erosion though they are also very brittle. 

Some of these properties provide opportu- 
nities for all sorts of applications but they, 
also make the material difficult to machine. 

Up to now almost all ceramic components 
have been cast into shape and then finished 
on conventional grinding machines. Yama- 
zaki says this is slow, generates serious 
tolerance problems and provides little flexi- 
bility in terms of shapes. 

The new Yomazaki machine, called the 
Ceratech, was developed with the help of 
Tokyo University's production engineering 
institute. Still a prototype, the company 
says it could build production models now 
to special order. The industry is expecting a 
price tag of around £160,000 to £260,000. 

Ceramics cutting and shaping is carried 
out on the machine by conventional metal- 
lic bonded minding wheels - wheels of iron 
or steel with an outer surface of diamonds. 


The problem with , 
the grinding whet 
still suffers from pretty 
rburimdui 


j ceramics is that 
although very bard, 
rapid wear, the 
diamonds (or earburtindiun if that is used) 
breaking away and losing the shaping 
edge's profile. This then requires treeing 
and dressing - bringing the wheel back to 
balance and "shaving" the wheel surface. 

For treeing and dressing, Yamazald uses 
the proven technique of 
ing, an electrical current which, 
spark erosion, burns away part of the 
wheel's surface. 

Electro-discharging requires a graphite 
electrode. Each electrode must have the 
same configuration as the particular wheel 
it is helping to tree and dress. The Ceratech 
system creates its own electrode profiles by 
actually machining them, using tools 
mounted in a tool magazine. 
ming llie wheel shapes into its 
control system, Ceratech has a master 
memory which instructs the tool to make 
the 
16 

wheel used by the machine. 

Curved, rounded and angular pieces can 
be shaped by the machine which also has 
an adaptation for making hotemaking eas- 
ier. Internal grinding is carried out by 
vibration; but the machine produces ultra- 
sonic sounds, cutting down the appalling 
noise that this type of 


memory which instructs the tool to make 
be right graphite profile for any one of the 
6 different configurations of grinding 


work sometimes gen- 


The whole system is just emerging, says 
the company, "but this unit resolves many. 
of the difliculties that have held back the 
widepread use of ceramics in engineering.'* 


US security in 
eye of beholder 


BY PETER MARSH 

SECURITY-CONSCIOUS organi- 
sations which use computers 
will increasingly subject their 
employees to equipment that 
monitors their handwriting, 
voices and eyeball characteris- 
tics to check their identities. 

The most fool-proof identifica- 
tion methods, according to a 
study* by the US Office of Tech- 
nology Assessment (OTA), are 
techniques to scan the blood 
vessels in people's retinas. No 
two people, even identical 
twins, have the same pattern. 

The state of the person's 
health and other factors such as 
whether the individual has grit 
in his or her eye are unlikely to 
affect the recognition proce- 
dures. 

Retina-identification equip- 
ment is currently highly expen- 
sive, at up to $10,000 far one 
machine. The cost would have 
to be brought down to nearer 
$2,000 for the systems to be 
commercially acceptable, says 
the OTA, which is a research 
arm of the US Congress. 

Hardware for scanning eye- 
balls is among a Family of 
so-called biometric systems that 
may be useful in protecting the 
security of computers. Biomet- 
rics uses biological characteris- 
tics, the most obvious of which 



are fingerprint patterns but 
which also include the speed at 
which people type and the exact 
sound of their voices, to identify 
a person before he or she is 
allowed to feed data into a com- 
puter or take it out. 

Biometrics has to some degree 
already been introduced in per- 
sonal identification systems used 
in the place of locks and keys to 
monitor people attempting to 
enter high-security buildings, 
such as banks and military 
establishments. The technique's 
use in computers has so far been 
limited. 

But this may change, says the 
study, aa users of computers 
become more security concious. 
“As the use of (computer) 
systems increases, the vulnera- 
bilities, threats, arid risks of mis- 
use have become dearer, and 
information security has become 
a prominent issue for many gov- 
ernment agencies and private 
users." 

Useful biometric techniques 
listed by the report include: 

•Hand geometry. Automated 
methods measure the distance 
between fingers when out- 
stretched or take infrared 
images of the people’s hands, 
identifying minute troughs and 
peaks in the surface. Problems 


can occur if an individual suf- 
fers a cut or sprains a wrist, 
events which change his or her 
hand profile and disrupt the 
.identification system. 

•Fingerprints. Techniques 
based on fingerprints are proba- 
bly the most advanced form of 
biometrics. There are about 100 
fingerprint-based identification 
systems installed in the US, 
mainly in high-security premises 
to check on people who want to 
have physical access. 

■Voice identification. Here the 
systems are not fool-proof. A 
bout of coughing or a nervous 
laugh can make it appear that a 
person authorised to use a com- 
puter system is in fact an impos- 
ter. 

•Signature dynamics and key- 
board rhythms. Some studies 
have suggested a person always 
writes nis or her name or 
thumps the keys of a computer 
in the same way. As a result, 
systems linked to personal pat- 
terns of this sort could be used 
in high-security equipment. 
More work probably needs to be 
done before the hardware is 
fully commercial. 

‘Defending Secrets, Sharing 
Data, Office of Technology 
Assessment, Government Print- 
ing Office, Washington DC 


Competitor in view for BT 


BY GEOFFREY CHARUSH 

TIMEFRAME EPNITEX of the 
UK has launched its public vi- 
deotex service in competition 
with British Telecom’s PresteL 
In videotex, a user has a com- 
puterised colour display terminal 
connected to an information 
memory bank over a telephone 
line. "Pages' of information, put 
into the bank by information- 
providing companies, can be ac- 


ting the keyboard, often 
via “tree and branch" techniques 
that enable particular pieces of 
data to be found. 

Epnitex, however, has added 
refinements. For example, the 
screen is automatically updated 
if the information in any of the 
lm available pages is changed at 
the source. 

More important, however, is an 


added service called Epnimail, in 
which all the users are provided 
with a "telephone number" and 
can have screen-compiled mes- 
sages sent to them from another 
terminal Screen users are told if 
there is a message waiting for 
them by means of an alerting 
le top o 


note which a 
the screen, 
autoina 


at the top 
can even be 


French take packaging into the field 


BY GEOFFREY CHARUSH 

PARIS COMPANY Vacu-O- Lead- 
er has designed a disc-shaped 
two-way plastic valve which, 
welded on to a bag or package 
can be used for vacuum sealing 
or for injecting a protective gas 
like carbon dioxide. It thus be- 
comes passible to package foods 
on site. This means, for example. 


that crops can be taken straight 
from harvesting and packed at 
the earliest stage to preserve 
maximum freshness. 

For air removal, the French 
company has also developed a 
hand-held vacuum gun, for use 
on the valve, and a larger pow- 
ered unit drawn by a tractor. 


Air removal is an effective 
way of preventing biological deg- 
radation. But the French system 
is also suitable for other materi- 
als including paints, pharmaceu- 
ticals and natural textiles, where 
it has the added advantage of 
reducing the volume of the pack- 
age by 50 to 70 per cent. 


Company Notices 


SECOND NOTICE OF REDEMPTION 
To tlte borders of 
MURATA MANUFACTURING 
COMPANY* LTD. 

U.S.$ 100,000,000 334 per cant. ConvortMo Bonds 
1999 

and U.5.$100,000,000 3 % percent Convertible 
Bonds 2000 (together the "Bonds") 

Second notice (the first notice was given on 30th Septamar, 1967) is 
hereby given that pursuant to Condition 6(B) of the Trust Dead dated 
6th February, 1984 and the Trust Deed dated 29th dune, 1984 each 
between The Fuji Bank and TTust Company (the “Trustse") and Murata 
Manufacturing Company, Ltd. (the "Company"), the Company will 
redeem all the Bonds on 25th November. 1987 at a price of 104 per 
centof the principal amount of the Bonds with accrued interest thereon 
to the said redemption data. 

The Bonds wfl cease to bear Interest from the said redemption data, 
and principal, premium and accrued interest of the Bonds wU become 
due and payable on the said redemption date. 

Payment of the Bonds shall be made against surrender thereof, together 
with all coupons appertaining thereto remained unmatured, on and after 
the said redemption date. 

Any Bond may be converted into shares of the Company, at the option of 
the holder thereof . up to the dose of business (In the place of the office of 
(he Conversion Agent where the Bond k deposited tor conversion) on 
25th November, 1967 end therehnr the conversion right of the holder 
thereof wtH become null and void. 

Conversion or payments of the Bonds shall be made et The Fufi Bank, 
Limited, 25/31 Moorgate. London EC2R 6HQ; DaHchi Kanayo Bank 
Nederland N.V., Singe! 540, P.O. Box 10058, 1017 AZ Amsterdam; 
Swiss Bank Corporation. Aeschanvaretadt 1, PjCL Box 1132. CH-4002 
Basle; Morgan Guaranty Trust Company of New York, 35 Avenue das 
Arts, B-1040 Brussels; The Tokal Bank, Limited, Bockenheirmer 
Landstrasse 61-53, D-6000 Frankfurt/Moin 17; Yasuda Trust and 
Finance (Hong Kong) Limited. 1601 Hutchison House. 10 Harcourt Road, 
Hong Kong; The Long-Term Credtt Bank of Japan, Ltd., iSKlng WUnam 
Street London EC4N 7BR; The Su mi tomo Bank, Limited. Temple Court 
11 Queen Victoria Street London EC4N 4TA; Citibank (Luxembourg) 
S.A., Avenue Marie Theresa 16, Luxembourg; Kredietbank S-A- 
Luxembouraeoise, 43 Boulevard Royal, PX>. Box 1108, Luxembourg; 
Bayerfeche Varah wb ank Akttengese to chaft. KanSnaLFaulhaber-strasse 
1 and 14, D-8000 Munich 2; The Bank of Tokyo, Ltd., 4-8, rue 
Salnte-Anne. 75001 Porta; The Sumitomo Trust A Banking Company 
Limited. UIC Building, 5 Shannon Why, #02-16 Singapore 01 0& 
Conversion price of the Bonds aa of 12th November, 1987 is aa follows; 
Bonds dua 1999, Yen 1,951.30 per Share; Borate due 2000, Yen 
1,990.70 per Share. 

The dosing price of the shares of the Company on the Osaka Securities 
Exchange on 9th November. 1987 was Yen 2J300. 

The fixed rates of exchange appacable upon conversion of the Bonds 
into shares of the Company are as fofowa: Bonds due 1999. Yen 235.15 
per UA$1 JJO; Bonds due 2000. Yen 23345 par ILS.S1 .00. 

The aggregate principal amount of die Bonds outetarafing as of 9th 
November, 1987 were as folowK Borate due 1999, 

Bonds due 2000, U.S£S,760J)0a 
MURATA MANUFACTUfUNQ COMPANY. LTD. 

26-10 Tonffn 2-chome, 

Nagaokakyo-shL Kyoto, Japan. 

Dated 12th November, 1967 


LEUM INTERNATIONAL 

INVESTMENTS N.V. 

U5 S20 M1U0N OWUNTCED FUMING 
RATE NOTES 1987 SERIES TT 

EXTEUXBLETO 1990 
Hie imereu rate appfcfeta to fbe Sow 
Notes In respect et tha m month pariod 
aonxnencMg ttth Nowmter 1967 Imb 
been fixed ct 7 ‘ per annum. 

The Interest amountWg to US S3RS6 per 
SLOOO principal smeun of Dm notes 

wllbegaidon 12th May 1988 apta* 
pnsenMMn of Coivon No. IS. 

BANK LHJMt TRUST COMPANY 

OF NEW YORK 
Principal Paying Aeant 

bank bum! vohjaa @1 


Art Galleries 

Hamm Gregory: Wottroekwre 

Evans Of flrtnal (1809-1858} 1C 

104 f w o efctto y o ) 10-1 (Sian 
Street St Jamad*. London. 

8731) 

NBMCI GMJJEMESb 7 Grafton at. Bond 8L. 
W1 EM S87S. CMatmaatoteftn itfto M 
oaa and atea by RECOLLECTIONS, ta TE» 
to St Dae. Uon-Ffi 8-&S0, Sat ftsfuK 

- UBOpanlngl2aiBNwunaapm. 


AIKed Irish Banka, pjx. 

Notice is hereby given that tee Or- 
dinary Share Register of the 
Company will be doted ftoa 4th 

Dec ember 1987, to 9th Dec e mber 

1987, both dates indnsive, for the 

propose of preparing warrants for 

an tmerim Dividend oo account of 

the year coding 31* March 1988, 

which wiH be posted to Sharefaold- 

cm on 15th Dec emb er 1987. 

By OrdW of the Board 


DA Maqor 
«amiETAHY 


DaMOnd. 

12* November 1987. 


I Pt VWe batuliv - 80 Breton 80**, Wt. 
01-488 2107. An axh&ffiOfl d Matas by 
Edwwd Bunt PBOO.iB7m. 4to Nowmh* - 
ten Oooaobor. MooAl 1M. Baa 10-12J0 


Clubs 


EVE tow wared too etoara ha r aasa of a 

“ on Mr paw aid wtoo lor nonay. 
iPl0530am.Placo anqto t>.«m- 


JF PACIFIC WARRANT COMPANY SjL 

Sodctc Anonyme 

Registered Office : 2, boulevard Royal, Luxembourg 
R.C. Luxembourg B-24492 

Shareholders are hereby convened to the 

ANNUAL GENERAL MEETING 
Of shareholders of JF PACIFIC WARRANT 
COMPANY SA. will be held at the head office of 
fianque Internationale a Luxembourg, Societe 
Anonyme, 2, boulevard Royal, 2953 Luxembourg, on 
Friday, November 20, 1987 at 3.00 pjn. with the 
following agenda: 

1. Submission of the Reports of the Board of Directors 
and of the Statutory Auditors. 

2. Approval of the Statement of Net Assets as at June 
30, 1987 and of the Statements of Operations for 
the period then ended; Appropriation of the Net 
Profits 

3. Discharge of the Directors and of the Statutory 
Auditors. 

4. Receipt of and action on nomination of the Directors 
and of the Statutory Auditors. 

5. Miscellaneous. 

The shareholders are advised that no quorum is 
required for the items on the agenda of the annual 
general meeting and that decisions will be taken on a 
simple majority of the shares present or represented at 
the meeting with no restriction. 

In order to attend the meeting of November 20, 1987 
the owners of bearer shares will have to deposit their 
shares five clear days before the meeting at the 
registered office of the Company or with Banque 
Internationale a Luxembourg, Societe Anonyme, 2 
boulevard Royal, Luxembourg. 

The Board of Directors 


THE COMMERCIAL COMPANY 
OF SALONICA PLC. 

NOTICE IS HEREBY GIVEN that the Seventy sixth Annual 
MEETING of the company will be held at the company's offices in 
Athens (Greece), Kerkyras street 49 on Thursday the 17th day of 
December, 1987 at KfcOO am. for the following p ur po se s: 

!) To receive the Report of the Directors and the audited accounts of 
the Company for the financial year ended 31st December 1986. 

2) To propose the following resolution for the re-election of Directors of 
which special notice has been given to the Company in accordance with 
sections 42 and 18S of the Companies Act 1948; that Mrs. Charlotte J. 
Saporta and Mr. Dintitrios P. Spiiiacoa who has attained the age of 70 

yeara be ro-dccted as directors of the Company. 

3) To a pp ro ve the re-appointment of Mr. Antonios F-Coumboolis who 

offers himself for re-election as director of the Company. 

4) To approve the re-appointment of Hardy & Col as auditors of the 

Company. 

5) To approve that the remuneration of the Auditors **»*» be fixed by 

the Board and to determine tbe remuneration of the Directors. 

In accordance with article 21 of the Articles of Association Share-boldent 
desiring to be present or to vote at the meeting most deposit their shares 
ax least five days before the Meeting at tire offices of the Company at 
Thessaloniki, or the Company’s offices in London, Messrs. Hardy and 
Co, 166 Streatbam HiQ, London SW2 4RU or at Pierson. Hddring & 
Pieraon, Amsterdam. 

Any member of the Company entitled to attend and vote at the Meeting 

may appoint another person (member of the Company or not) as his 
proxy to attend and vote instead of him 

Salomes, October 27th, 1987 

By Order of the Board 
CHARLOTTE JF.SAPORTA 
Director 


















32 




Financial Times Thursday No 


COMMODITIES AND AGRICULTURE 


l 

Wilber 12 


EC forced 
to abandon 
ethanol 
plan 


Supply tightness drives 
copper to record price 


Tungsten 
Association 
calls it 


Bad weather hits 
Australian grapes 


BY CHRIS SHEKWBJL M SYDNEY 


BY KENNETH GOODING, MINING CORRESPONDENT 


By Quentin Put h Brussels 


THE CASH price of grade A cop- 
per reached a record £1,540 a 
tonne in early dealings on the 
London Metal Exchange, yester- 
day. 

At the same time the backwar- 


THE EUROPEAN Commission 
yesterday abandoned a plan to 
subsidise the production of bio- 
ethanol as an alternative fuel 
from surplus grain and sugar- 
beet. 

In the face of damning conclu- 
sions on the economics of such 
schemes, and strong opposition 


Copper 

Cosh high grade (£ per tonne) 
1800 


a day 


a *. i • 


da t ion (the premium for cash 
metal over the forward price) 
ecedented £320 


reached an unprecedem 
a tonne. 


from many leading Commission- 
ers, Mr Jacques Delons, the Com- 
mission President, agreed that 
the idea should be shelved for 
the time being. 

The decision will be a major 
blow io strong agro-industrial 
lobbies in Prance and Italy, led 
by Mr Raoul Gardini's Ferruzd 
combine, which had hoped for a 
substantial subsidy programme 
to h+elt reduce the Community's 
food surpluses. 

In the end the opposition 
within the European Commls- 


“ People need copper in the 
next two or three weeks and are 
willing to pay substantial premi- 
ums to get it', commented Mr 
Robin Bhar of Rudolf Wolff, the 
metal trading group. 


He suggested the tightness in 
copper supplies could continue 
for another three or four 
months. 

There is no limit to backwar- 
dation and nothing the LME can 
do to stop it going even further, 
unless it suspects someone is try- 
ing to comer the market - "and 
there is no suspicion of that so 
far’, said Mr Bhar. 

In afternoon trading the cash 
rice eased back to £1,470, still 



TUNGSTEN MINES world- 
wide have been shutting 
down at such a rate that the 
main producers* association 
has decid e d to dose at the 
end of the year, Reuter 
reports from Geneva, 




Prices for tungsten, a 
valuable hard metal aaeo to 
make light bulb fflanetta 
and to strengthen steel, are 
lower than at any time 
since 1968 after adjusting 
for inflation. 


VINEYARD OPERATORS in the 
key wine-producing region of 
South Australia are tlus week 
still trying to estimate the costs 
of the freak hail storm and frost 
attack which swept through the 
area last month. 

The bad weather struck at an 
important moment in the early 
growth of this year's grapes and 
la seen as a damaging setback for 
the 1988 vintage ana potentially 
for the country's thriving wine 


rapidly -recent monthly figures 
of 3ra-3.4m litres are around dou- 
ble those of last year, which was 
itself a record. 

The spring frost attack 
occ u rred in the southerly areas 
of Coonawarra and Padthaway, 
both well known for their pre- 
mium red and white wines. 


~ . ... ; 

israz 

Li IP ! i Will 

■ 

MM 

ge 

• 

juice 

i prices 

jumi 

V 

By Arm Char 

mb in Sao Paulo 

[’HE STRENC 

Tit of New York 

irange juice fumres has trig- 
gered two sharp raes In as many 


nioes for certain grape variet- 
ies almost doubled to AS2.000 
£750) a tonne at one point, bin 
g to the Adelaide-based 


Temperatures were reported to 
have dipped to minus .seven 
degrees Centigiwle. Padthaway 
fs said to have lost half its crop 
and Coonawarra about a quarter. 
However, there could yet be 
some re-growth. 

The hail storm came a few 


Sion, led by Britain's Lord Cock- 
field, Mr Peter Sutherland, the 


Competition Commissioner, and 
Mr Henning Christophersen, the 
Budget Commissioner, forced its 
abandonment. 


are now at an inordinately low 
level of 113,766 tonnes compared 
with 261,000 tonnes at the end of 
1986. 

"Such levels have not been 
seen since 1974", said Sheareons, 
adding that strikes which have 
spread through the Peruvian 
copper industry - which supplies 


In a separate development yes- 
terday, the LME suspended trad- 
ing in its standard copper con- 
tract further forward than three 
months delivery, effective imme- 
diately. 

This was to enable the LME 
authorities to explore the possi- 
ble introduction of fire refined 


Because so many produc- 
ers have simply stopped 
mining the metal, the Pri- 
mary Tnogaten Association, 
representing nearly two- 
thirds of all production and 
90 per cent of ex ports, has 
decided to doee. 


An independent study into 
bio-ethanol production had con- 
cluded that it would require sub- 
sidies more than twice the level 
of current export subsidies to be 
viable. 

It actually concluded that it 
would produce more energy to 
bum the surplus crops than to 
turn them into the fuel. 


The three month price ended 
£28.50 up at £1,203.50 a tonne. 

Demand for copper has out- 
stripped supply for the past four 
years and stocks are now at an 
exceptionally low level. 

Shearson Lehman Brothers 


pointed out in its Metal Markets 
Review yesterday that combined 
LME and Comex (New York 
Commodity Exchange) stocks 


world production and 3 per cent 
of refined output - have contrib- 
uted the the bullish sentiment. 

Meanwhile, US copper produc- 
ers this week have increased 
their prices above the psycholog- 
ically important SI a lb level - 
yesterday Phelps Dodge said it 
was raising the price for whole- 


plate electrolytic copper cathode 
by another 5 cents to HO cents a 
pound, effective Immediately. 


against the standard contract, 
said Mr Michael Brown, the chief 
executive. 

Traders pointed out that there 
was little interest in standard 
copper - about 250 tonnes a day 
is traded compared with about 
225,000 tonnes of grade A cop- 
per. 

However, consumers wanted to 
continue the trade in standard 
copper. 


There simply were not 
enough producers," said Mr 
Michael Mahy, head of the 
group. 

Delegates at & UN-spon- 
sored review of the tung- 
sten market said Canada, 
France, Spain and Rwanda 


had stopped producing 
tungsten. The US is produc- 
ing one-twentieth its level 
of a decade earlier. 

Tungsten holds its form 
at temperatures at which 
iron would boil, and is used - 
in rockets and missiles as 
well as in equipment for 
steel and aluminium mills. 


Association the speculation la 
starting to die down and prices 
have eased back. The association 
also believes the damage may be 
gatchier than was thought at 

The worst estimates suggest 
grape production in 8outh Aus- 1 
trail a will be down by some 
20,000 tonnes, or more than 7 
per cent of the state’s 275,000 
tonne crop. Pessimistic estimates 
put the figure at 10,000 tonnes. 

The true answer may never be 
known, since the remaining crop 
may still benefit or suffer from 
conditions over the rest of the 
growing period. 

South Australia accounts for 
about 56 pa- emit of the coun- 
try’s grape output. From the 
export point view the 
could not be worse- timed. 


area, 

laide, hitting places like Eden 
Valley, Rowland Flat and Lyn- 
doch. 

No area was hit by both frost 
and hafl. Producers affected by 
the frost include Hardy’s, Sep- 
pelt's and Undemsns. The hail 
mainly affected independent 


growers and vineyards belonging 
to Penfolds and Yalumba. 



Although only a small propor- 
tion of total output goes to 


tlon of total output goes to 
exports, they have expanded 


According to the Wine and 
Brandy Producers' Association, 
the weather damage means there 
will not be enough Pinot Noir or 
Ch&rdonnay grapes available 
this season. Supplies of Cabernet 
and Shiraz grapes will also be 
hit. 

.Predictably, the immediate 
effect of the weather damage has 
been to drive up the price of 
premium variety grapes. Prices 
nit AS2.000 a tonne, but quotes 
have since come back below 
4S1.500. 


ought esti 



2Ji 


( In 



•ft 1 


Rfif, 




gaga 




Bio-ethanol production would 
also result in substantial by- 
products of cereal substitutes 


such as starch and gluten, to the 
tune of some 374 kg per tonne, I 
which would further erode avail- 
able cereal markets, the study 
said. 

Supporters of the plan argued 
that it would provide another 
outlet for the EC grain and beet 
surplus, and give a much needed 
political signal to farmers that 
their interests were not being 
ignored in the farm reform pro- 


SAUDI ARABIAN motorists are 
facing a 52.6 per cent rise in the 
pump price of premium grade 
gasoline as as a result of the 
Government's continued policy 
of cutting consumer subsidies - 
but at least this time they have 
been told what is going on. In 
the past subsidy cuts have usu- 
ally been made with as little 
publicity as possible and hidden 
behind the screen provided by 


Saudi Arabia winds down its subsidy programme 

ists are was announced publicly, is part 17.’-.-. n orro l/xolrr, nf stated that it supports a move 1,000 kwi 

9 in the of the successful Saudi pro- T Lilli OdilC iUUivo dl LilC toward unleaded gasoline. the secor 

i grade gramme to wean its people from , . . . . « Saudi Arabia has often moved 5R150 bey 

S kingdom’s softly-softly approach pSSirHaLriS. -mi 

>y have on everything from electricity to reducing consumer price SrerelaS raised honuM, a 

on. In and water to sugar and rice. Fur- . . • the Government Implemented a 

ve usu- ther subsidies, since cut, were t)rOt6fitl OT1 20 halala tax across the board on 

in lift!** nffAiwI fnr tfmwino whMt*. nnri xr all nmdiictA. The nrice hSkiw 1,000 kwl 


of the successful Saudi pro- 
gramme to wean its people from 


subsidies. During the heyday of 
the oil boom they were cush- 


Opponents said that not only 
were such plans hopelessly 
uneconomic, but the fuel was an 
expensive and environmentally 
unattractive additive to petrol 
In spite of the setback, EC offi- 
cials expect France to go ahead 
with support for bio-ethanol pro- 
duction, although the Italian 
government is much more 
divided on the issue. 


falling world markets. 

On Monday night, the king- 
dom's Council of Ministers 
announced that the Government 


had raised the price of premium 
gasoline from 35 halaias a litre 
(35.3 cents per US gallon) to 53.4 
halaias (63.8 cents). The whole-' 
sale price is now 46 halaias a 
litre. 

The new decree covers only 
the premium grade, which is vir- 
tually the only type available to 
motorists - all other refined prod- 
uct prices remained the same. 
"The rise in the price of pre- 
mium gasoline will not therm ore 
affect such productive sectors as 
agriculture, industry and trans- 
portation," the Council stated. 
Diesel, for instance, still sells for 
12.1 cents per gallon. 

The price hike, which had 
actually gone into effect before it 


The idea will be discussed once 


again by EC Energy Ministers on 
Friday, but they are not expec- 
ted to give it much support. 

At Fen mi Group headquarters 
in Ravenna, a spokesman for Mr 
Gardini said the Italian concern 
would have no comment on the 
decision until the official com- 
munique from Brussels was pub- 
lished. “We want to study that 
first," he added. 


the oil boom they were cush- 
ioned from inflation by subsidies 
on everything from electricity 
and water to sugar and rice. Fur- 
ther subsidies, since cut, were 
offered for growing wheat and 
importing barley. Over the 
period from 1971-1986, the Gov- 
ernment spent SR22.8bn on 
direct cash subsidies and another 
SR3.4bn on interest-free credits 
for loans for economic projects. 

When the oil boom went bust, 
the Government found itself 
faced with the problem of cut- 
ting the huge subsidy bill both 
to save money, and to encourage 
more efficient use of resources. 
That problem was eased, how- 
ever, by the general fall in world 
commodity prices, which 
allowed subsidies to be cut 
stealthily. "Why tell the people 
?" asked one government offlclaL 
"They don't faiow, so let them 
continue to give us credit for the 
subsidies." 

The blow has been cushioned, 
or, to be more accurate, con- 
cealed b ec ause commodity prices 
have declined so far that the the 
effects of the removal of subsi- 


dies has not been apparent in 
retail prices. The Saudi cost of 
living registered a 02 per cent 
decline in the first quarter of 
1987 in spite of subsidy remov- 
als. 

Saudi Arabia has been a grate- 


ful beneficiary of the continuing 
trade war between the US ana 
the European Community, 
which has seen the two giant- 
trading groups aggressively 
under-cutting each other's food 
export prices to the Middle East 
market 

The Saudi Government for- 
merly paid subsidies on flour, 
sugar, rice, edible mis, and pow- 
dered and condensed milk. 
Today, all except the flour, 
which is linked with the subsi- 
dised wheat production, have 
lost their subsidies, and all with- 
out any public announcements. 

Barley has the only remaining 


import subsidy, and that has 
been cut from SR300 per tonne 
to SR100 per tonne. The wheat 
cultivation subsidy was cut from 
sr 3,500 per tonne to SR2.000 per 
tonne, but that has still proven 
insufficient to stem massive 
over-production of expensive 
wheat. In an attempt to cut 
wheat production and barley 
imports an SRI ,000 per tonne 
barley cultivation subsidy was 
introduced this year. 

The latest subsidy cut on gaso- 


line is designed to strengthen the 
kingdom's domestic refinery sec- 


kingdom's domestic refinery sec- 
tor, operated by Petramin, the 
state oil company. One ofl. indus- 
try executive suggested that the 
price hike will help finance refi- 
nery upgrading needed to switch 
away room leaded fori produc- 
tion, which causes severe pollu- 
tion problems for Saudi Arabia’s 
cities. In the past Petromin has 


stated that it supports a move 
toward unleaded gasoline. 

Saudi Arabia has often moved 
two steps forward and one bock 
in cutting subsidies. This 
occurred mien gasoline prices 
were last raised fit 1984. At first 
the Government Implemented a 
20ha2alatax across the board on 
all products. The price hikes 
were scaled bade, however, fol- 
lowing a public outcry. 

The aim was to get Petro min's 
prices to a break-even level, but 
the extra revenues were col- 
lected not hf Petramin, but by 
the Treasury. At that time the 
price of gasoline was raised from 
27 haininw per litre (27.3 cents 
per gallon) to 35 halaias per litre. 
Before the 1984 rise diesel cost 
3.5 cents per gallon, now it still 
costs a little more than 12 cents 
per gallon. 

The Government also encoun- 
tered resistance when it restruc- 
tured elec tr ic i ty rates. Saudi Cus- 
tomers were paying 7 halaias a 
kilowatt /hour, whue the cost of 
generation was 25 halaias. in 
October 1985, the, Ministry of 
Industry . and. . Electricity, iaa 
programme designed' to trim its 
SRJLSbn a year subsidy burden, 
decided that customers would 
pay SR70 only on their first 


1,000 kwh, rising to SR100 for 
the second 1,000 kwh and to 
5R150 beyond tint. 

Saudis use little insulation but 
a lot of air conditioning in their 
homes, and the increase was 
resented. It was scaled back by 
December, so that the SRTO per 
1,000 kwh. would apply for the 
first 8,000 kwh. The rate was not 
rolled, back to the original level, 
however. 


Other- price rises have been 
made. Postal rates have gone up 
by almost 350 per cent and fees 
for visas, drivinglicenses and 
other government services have 
been raised. 



So far water has escaped real- 
tlvely lightly and remains 
heavily subisidised. A cubic 
metre of desalinated water costs 
a Saudi customer 8 cents per 
cubic metre, but it may cost the 
Government as much as SI 30 


per cubic meter to produce. 
Saudi well water is cheaper, but 


Saudi well water is cheaper, but 
is still sold at a subisidised price. 
The Gulf Co-operation Council 

Hm jfpternilnaH 'that. thA* that . 

water prices skoukTbe raised to 
promote conservation, but so far 
no action has beat taken chi the 
proposal. 



WORLD COMMODITIES PRICES 


REUTERS (Bas« Saptsmber 18 1931 - 100) 
Mov 10 Nov 9 month ago yaar ago 

iesas iegaa 1 6773 isias 

DOW JONeS (Bosk Sapmmbar 18 1931 ■ 100) 



COCOA £/tomu» 


Spot 128.28 12851 127.23 121.78 
Futuna 129.34 129.00 13248 119-90 


LONDON MARKETS 


OOM 462-462% 

Opening 481MM82 
Morning fix 46130 
Afternoon tlx 461 _B5 
Days Ngh 462M-483 
Day's low 46D!W81 
Gold A Ptattaum Coina 


2591*460 

258U-2S9 

257.920 

2S9.175 


£ equivalent 


Crude o« (par banal FOB November) 

Dubai 

Brant Blend 
W.T.I. (1 pmeritj 

OS products (NWE prompt dotrery par toms OF 
December) + or - 

Premium Gasofcw 181-183 

Gas 01 188-164 +1 

Heavy Fuel OB 92-83 

Naphtha 166-168 +1 

Patmhum Argut Estimates 


Ctoaa 

Previous Mgb/Law 

Dvc 

1125 

KITES 

1128 1115 

Mar 

1164 

1138 

1165 1149 

Moy 

1184 

1158 

1183 1170 

J* 

1202 

1178 

12031190 

Sap 

1221 

1198 

1221 1210 

Dao 

1244 

1223 

1244 1238 

Mar 

1269 

1247 

1287 1280 


ALUMINIUM PRICES continued their 
decline over the week on the London 
Metal Exchange In what dealers 
described as a "very nervous’ market 
The fall of sterling against the dollar in 
the afternoon interrupted the decline, 
triggering shortcovering. But dealers are 
losing confidence (n the the market's 
ability to sustain any rafly. Potentially 
bullish factors such as the continuing 
lock-out at Alcan's Shawirtigan. Quebec, 
smelter and the fall of 119,000 tonnes ki 
stocks held by the International Primary 
Aluminium Institute had been virtually 
ignored by the market they said. The 
continued strength of copper prices 
discouraged selling in other markets. 
Both lead and zinc prices held steady, 
while the price of nickel rose moderately 
on currency factors. Meanwhile cocoa 
prices shewed firm gains In the 
afternoon guided by a strong market In 
New York, lack of producer sales and 
underlying physicals interest from the 
trade, dealers said. This was seen as a 
technical correction after the recent 
five-year lows seen in the market 
Dealers feel that West African producer 
countries will probably sell into any 
decisive rally - but this has not yet 


US Eagle 

Mapistsaf 

Krugerrand 

1/2 Krug 

1/4 Krug 

Angel 

1 /loAngal 

New So*. 

OWSov. 

Britannia 

NotBa Plot 


475- 480 

476- 480 
<0445 
240-249 
119-127 
471-476 
47-62 

1 0Sfc-IOS* 
TOSK-IIOtt 
475-480 
495605 


287-270% 
267-270 Vi 
2S9’*-281Vi 
135-140 
67-7114 
28416-26714 
28VS-29VS 
61-6116 
61-62 
287-27014 
27716-282% 


Turnover 5347 (3530) lots of 10 tonnes 
ICCO Indicator prices (SDRs per tonne). Dafty 
price for November itt 143181 (1427091 .10 day 
average for November 11: 143861 (144260) . 


Goto (per troy OjJ 
Silver (per trayoz) 
Platinum (per noy oz) 
PatacHmn (per boy oz) 


848246 +4X0 

383X0p +6X0 

5489.50 +11X6 

610800 +1.76 


POTATOES 2/tonne 


AiumMum (free market) 81610 -60 

Copper (US Producer) 10887c +837 


Silver (fine ounce) 

UK pence 


Spat 383.30 

3 months 371 JO 

6 months 37850 

12 months 394.70 


UScte aqutv 
64R00 


Lead (US Producer) 4800c 

Nickel (Tree market) 272c +3 

Tin (Eixopeen tree market) £4000 +20 

TTn (Kuala Lumpur market) 1760r +807 

Tin (New Yorig . 3285c 

Zinc (Euro. Prod. Price) 6820 

Zinc (US Prime Western) 48375c 



Ctosa 

Previous 

tSgti/t-ow 

NOV 

904 

824 


Fab 

1024 

1024 

1024 

Mar 

924 

946 


Apr 

1576 

1584 

15841566 

May 

Nov 

1714 

1704 

906 

17161704 


Turnover 653 (804) IMS Of 100 1 


CaWa (Bve weight)! 98l8p +887* 

Sheop (dead wetahbt 19260p -027* 

Pigs (Bve weight# 74w47p -026* 


SOYABEAN MEAL g/tonne 
does Previous 


HWLow 


Ahstontam (99-7%) 
Strike price S wme 


Cate Puts 
Oct Nov Oct Nov 


London dally sugar (raw) $1912Qx -860 

London daily sugar (white) 619560 k -800 

T«e and Lyie export price E21260 
Bailey (Engteh feed) £10800. 


13460 13850 
134 JO 13850 
13360 13260 

12440 12440 

12340 12240 

12440 12340 

12840 12800 


13440 13440 
13880 13340 


MaJza(USNo.3yeaaW) £13145 
Wheat (US Dark Northern) £37.76 


Turnover 32 (GO) lots of 100 1 


AkUnkro (996%) 
Strike price S tonne 


Cate Puts 
Jan Mar Jan Mar 


Rubber (spot)? 
Rubber (Dec^V 
Rubber (Jan)V 


Rubber (Jan)f 682fip 

Coconut Oil (PNflpplneo)fi $4B040vv 


6165p +160 

estop +160 

682fip +165 


«*Qft»H8 par tame) 

Raw Ctoaa Previous 


Wgh/Low 


100 57 84 

88 6814 96% 
77% 81% 110 


happened. Coffee prices were fiat, 
although the agreement by "other milds" 
coffee producers, together with Brazil 
and Colombia, to stop cheap coffee 
sales to countries outside the 
International Coffee Organization (ICO) 
was viewed as constructive, dealers 
said. 


Copper (Grade A) 
Strike price S tonne 

2050 

2200 


Cate Puts 
Jan Mar Jen Mar 
163 


Palm Ofl ( Malaysian K> 638540 / 

Copra (PhUppinasjg 531600/ 

Soyabeans (US) 613860 +060 

Cotton -A* Index 7460c -0.70 

Wodtopa (64« Super) 488p 


£ a tonne unless otherwise stated, p-penoa/kg. 
o-ceraa/nn. r-ringgR/ftg. w-Oec/Jan. 
x-Nov/Dec.y-Oec. z-Jan/Fob. T Meat Ccmmierton 
average l at a l o de * change from ■ week ago. 

V London physical market $ CF Rotterdam 


18800 17040 

17640 17820 

175.00 17740 

17560 17740 
17800 17740 

17840 18040 
18S40 18540 


17040 18940 
17740 17460 
1788017540 
1774017560 
17800 17560 
0 0 

0 0 


Close Previous 


Capper (Grade A) 
Strike price £ tonne 
1226 


Cate Pule 
Jan Mar Jan Mar 
46 


Aluminium, 987% putty ($ per terms) 


(Prices suppftd b y Amntgarrmted Metal Twang) 
Kerb dose Open Interest 


Ring turnover 8725 tome 


GAS Q8 S/toma 




don 

Pravtoua 

Wgh/Low 

Dae 

Jwi 

16440 

182.75 

16260 

10240 

184.00 18250 
16800161.76 

Fab 

Mar 

Apr 

16060 

15760 

16800 

16040 

15560 

15440 

16140 16040 


19940 20060 

20540 20800 

21040 21060 
21440 21540 
21460 21640 
21560 21740 

22140 22850 


2006019960 
20850 20440 
21140 20800 
21640 21240 
21660 21360 
21800 21800 
0 0 


Turnover. Raw 3882 (9560) lots of SO 
White 1825 (1480). 

Parte- Witte (fFr per tomafeCloaad. 


Caen 1610-20 
3 months 1605-15 


1610-20 
1610/1590 1585-95 


Ate mM aa66i5% purity (£ per tonne) 


1590-610 2612 lota 

Ring turnover 9400 tc 


asrari: 


Cash 1485-75 
3 months 1203-4 


1205/1185 


Ring turnover 85 .700 torn 


FWBQOT FUTURES C/1ndax point 

Close Previous Wgh/imr 


12314 12254 12214 122D4 

Apr 12886 12526 12S36 12454 

Jty 11264 11186 1125.0 11204 

BFI 11726 11736 11726 


COfTCEfi/torme 


Ctoea Previous HgtyLotv 


1295 1275 
1318 1298 
13421329 
1354 1860 



Copper, Standerd (£ par tonne) 

Cosh 1420-50 1380-6 

3 months 1170-90 1150-5 

Stiver (US cents/fine ounce) 


1196-9 84.746 lots 

Ring turnover 0 tome 


Turnover 98 (106) 

OHABtS g/torme 

W h ee l dose Previous 


*1 lota 

Ring turnover 10400 1 


Cash 655-9 
3 months 667-71 


Lead (9 per tome) 


589 lote 

Rbig tmtavar 9650 tome 


110.10 10965 
11240 111J6 

114.10 11860 

11840 11640 
119.18 11850 
102.70 1026$ 

104.60 10465 


Htgri/Low 

110.10 11040 
1126011240 

114.10 11870 
1184611838 
11816 11890 
102.70 102.70 
104.70 10460 


Tbmorer: 2106 (1329) lots of 5 tomes 
tOO indicator prices (US cants par pound) tor 
November 10 :Camp. d&fy 11838 m&2» . IS 
dayevareoe 11296 (1 1248). 


Cash 345-7 
3 months 330-1 


349/3486 

335/389 


3486-49 

330-1 


Itickei (E per tonrw) 


33*5 1268 S loti 

Ring turnover 3464 tome 


Bmtay Ctosa Previous rtgh/tiwr 


10445 104.10 1046S 10460 
10740 10660 10740 10665 


Cash 32805 
3 months 3240-5 


3280/3270 

3280/3200 


Zinc (E per tonne) 

Cash 468-9 
3 months 471-2 


3225*35 8187 Ipta 

Ring turnover 18100 tonne 


109.10 10880 109.1010965 
11045 11845 1106510965 


9960 9960 9940 
10140 10140 101.00 


14.738 lots 


Turnover Wheat 101 (175). Barley 37 (11 8). 
lots oMOO tomes. 


WDoi prices have tended to ease sBghUy but 
e rratkaB y hi the pa« ten flays or so. Strength 
partestad throughout October despite twmoRan 
worid Stock market* and cafcutattara of simply 
and demand for the re ma in d e r of the 1967-68 
aalltag season sH emphasised the flkaMnod of a 
•hortatp and therefore dearer prices. The present 
aBQht price setback, exaggerated tor UK usire by 
weakness in the Austraten doaor, fc not sew aa t' 

nutyir reversal In the year-long upward trend of ' 
the wool market New bushwe* is rettwr quiet md 
there are isolated hint* of a slower t&k*up erf 
deavsrtes. 


Full Colour 
Residential 
Property 
Advertising 


APPEARS EVERY 
SATURDAY 
(Copy deadline 12 days 
prior to publication). 
Rate £35 per Single 
Column 

■ Centimetre. 

To find out more call 

CAROL HANEY 


North East England 


The Foaarid Tines proposes to pubfisii 
lists sowy on 


Wednesday, November 25, 1987 


For a full editorial synopsis and details if 
available advertisement positions, please conuct: 
HUGH WESTMACOTT 


or wnte to him at: 
Fermanwt House, The Headrow 
Leeds LSI 8DF 


FINANCIAL TIMES! 

EUROPE'S BUSINESS NEWSPAPER 


LONDON - FRANKFURT - NEW YORK 


A FINANCIAL TIMES SURVEY 

CITY OF WESTMINSTE! 


Friday December Ilth, -1987 \ 

The Financial Times proposes to publish a Survey on the above. \ 
Introduction \ 

Westminster b the histori c seat of Britain's political power. But It is far more than the visitor's linage of the 1 
Big Ben i and Buckingham Patao*. The Royal borough Is the size of a large provincial town and contains a subs* 
parto fUmton's business community. This survey will examine the pressures, problems and attractions ofLoi 
other city and will look at the business strategy outlined in the recent Westminster Business 2000 report/ 

Tourism ... I f. 


.^Market: 

K rrm» 


moi 

mti\ 


Ev f hoS n 5M^aSb2^L ,9h eWry yeaf ' **» tourt5t capita of the U Jcjwe will look at the iapact 


Housing 

More t han 10 0,000 peoplejive In Westminster, which has seen some of the fastest rising] 
not far from the gracious flats of Mayfair are council estates which free the same preW 
area. <7 


* prices in the U.t But 
; as any other ukA* city 


Shopping 

The Wet E nd Is no t just London's main shopping cen tre . The big stores of Oxford S 
money from aeras the worid. But careful devetopmerts such as Covent Garden and 
new and more Intimate atmosphere for shoppers. 


■ ami Band Street 
tiown have also h 


The rest of the survey win r e v ie w ; 

Business, parks, Entertainment and the Council. 


For further information on advertis in g please coitact : 

Brett Trafford, TO: 01-248 5116 

or write to him at : 

Financial Times, Bracken House, 10 Cannon Street, Undon EC4P 4BY 



FINANCIAL TIMES 

EUR0PE ; S BUSINESS NEWSPAPER 

LONDON - FRANKFURT - NEW Yfr^K 


" n* 


















- r 







I 'lnancial Timei Thursday November 1 2 1987 


33 


CURRENCIES, MONEY & CAPITAL MARKETS 


FOREIGN EXCHANGES 

Short covering boosts dollar 


THE DOLLAR rose nervously in 
thin European trading. Most US 
banks wereyciosedfor Veteran's 
Day, and dealers in Europe were 
not prepared to- speculate on the 
dollar's Immediate future, ahead 
of today’s US trade announce- 
ment. : - 

Forecasts for the September 
deficit range from about il4bn 

to tlBbn, with the market gener- 
ally expecting no great improve- 
ment over the August shortfall 
Of $15,68bn. 

A figure of around $16bn or 
above is likely to encoura^ sell- 
ing of the dollar. The median 
among forecasters is Sl4.7bn, but 
a lower deficit of around $ 12 bn 
will have only a limited impact 

as attention switches back to the 
US budget deficit 

President Reagan's comment, 
that he does not want to see a 
further weakening of the dollar 
will be ignored unless he and 
Congress agree on measures to 
cut the. budget deficit by more 
than the S23bn provided for In 
the Gramm Rudman bilL 

Short covering ahead of 
today's trade announcement 
pushed the dollar up to 
DM1. 6760. from DM1.6850; to 
FFr5.6850 from FFr6.6526; to 
SFr 1.3750 from SFr 1.3650; and to 
Y 136.26 from Y 134 .50. 

On Bank of England figures 
the dollar's index rose to 96.3 
from 96.0, . 

STERUNG-Tradfng range 
against the dollar in 1987 is 
1.7950; to 1.4710. October 
average 1.6620. Exchange 
rate index fell 0.1 to 75.4, 
compared with 78.2 ' six 
months ago. . 

Sterling fell back against a 


0 points to 
ile improving 
DM2.9725; to 


stronger doflar, but -rose against 
most other major currencies, as 
the pressure eased for an imme- 
diate cut in UK bank. base rates. 

There were no, factors to influ- 
ence the pound. -which was gen- 
erally on the sidelines. 

Sterling lost 70 points 
$1.7785-1.7795, while 
to DM29825 from 
FFr10.1125 from FFr10.0060; to 
SFr2.4450 from SFr2.4375; and to 
Y340.50 from Y24Q-2S. 

D-MARK -Trading range 
against the dollar in 1987 l» 
1.9305 to 1.6590. October 
average 1-8011. Exchange 
rate index 1514) against 1465 
afac months agOk 

The DrMacrk lost ground to the 
dollar in Frankfurt, on short cov- 
ering in a very quiet market. The 
West German Bundesbank did 
not intervene - when the dollar 
was fixed at DML6648, compared 
with a record low of DM1.6530 
on Tuesday. 

A deafer at a large bank com- 
mented that after the recent foil 
an adjustment in the other direc- 
tion was long overdue. 

The dollar closed at DM1.6745 
in Frankfort, against DM1.6615 


previously, with the recovery 
seen as a technical correction. 

Dealers continued to look 
towards a fall to DML65 far the 
dollar, but only expected this 
level to be reached in the near 
future If today's US trade figures 
disappoint and the US budget 
talks dragon without result. 

JAPANESE YEN-Trading 
range against' the dollar in 
1987 is 159.45 to 184^0. Octo- 
ber average' 148.27. Exchange 
rate index 228.1 against 226,6 
six months ago. 

The yen was a little weaker 
against the dollar in Quiet Tokyo 
trading. Dealers were reluctant 
to take a view ahead of the Vet- 
eran’s Day holiday in the US and 
today's US trade figures. 

The dollar rose to Y134.35 
from Y 133. 66 in Tokyo, showing 
no reaction to the comments by 
Mr Satoshi Sumita, governor of 
the Bank of Japan, that there 
was no plan for a coordinated 
cot in discount rates by the 
major central banks, and that 
coordinated intervention would 
continue. He denied the US Fed- 
eral Reserve had stopped sup- 
porting the dollar. 


EMS EUROPEAN CURRENCY UNIT RATES 



<30543 

7.95329 

206118 

7JI10S7 

23U97-. 

0.775716 

1519*4 




♦164 

♦129 

♦013 

+1-52 

-002 

+095 

+2.42 


*■ „ 


+090 
+053 
-061 
♦078 
-07 h 
+021 
♦212 


'tST 


*133 <4 
*16404 

*uvm. 

*13674 

*13012 


<40752 


t IN NEW YORK 

RmAl 

- Uteri 

Purina 

. 

t Spot 

lamb 

3 nneflu 

IWI 

17855-17865 

033-0 Jlpm 
037-a^m 
153-K3pn 

raa 

ms ant a—m 

i M to US 




POUND SPOT- FORWARD AGAINST THE POUND 


STERLING INDEX 




1*14 ri nm 

830 

M- 

753 

753 

9.00 

am 

75.4 

74.4 

nun 

am 

75j4 

744 

1100 

am -— 

753 

753 


p« 

7*3 

753 ■ 

100 

{** 

7 M 

753 

100 


744 

756 

100 

pm 

744 

753 

4JOO 

pm .... .... 

754 

- 753 


FINANCIAL FUTURES 

Gilts down as shares recover 


THE RECENT move from equi- 
ties to Government bonds was 
reversed yesterday as share 
prices improved. Consequently 
the need for an early cut in UK 
clearing bank base rates to sup- 
port equity prices receded and 
this reduced the attraction of 
holding UK gilts.' 

Consequently gilt prices fell 
sharply at Hist in the London 
International Financial Futures 
Exchange yesterday. The Decem- 
ber price opened at 12808, down 
from 124-16 on Tuesday and 
touched a low of 122-10 before 
recovering to a high of 123-17. It 
closed at 122 - 28 . 


m exits by President 

that 


116 

118 

120 

122 

124 

126 

128 

130 


UM 6H.T IV7VS8 arrms 
■ Cafe-Last hrta-LM 

Dae liar Ow Hw 

63i 7*5 am oil 

5,01 614 0.07 UO 

ia« 458 am zio 

in m iffi ini 

053 IE U9 tM 

020 2JB 526 5-19 

are L29 502 te 

aa as tn ui 

dvtonetaUI, Crib 44U Pats 2X94 
*ftaptalri: Crib 45163 Puts 33564 


A firmer dollar which reflected 
profit taking, the closure of some 
US markets yesterday and com- 

jan sug* 

he had seen the dtu- 

— for enough, appeared to 

be sufficient to restore some 
form of temporary stability and 
this helped equity markets to 
show a steadier trend. 

US Treasury bond futures fin- 
ished unchanged from Tuesday's 
closing levels. There were a 
number of variable factors 
affecting market sentiment Most 
of all speculators were unwilling 
and unable to make any dear 
assessment of market trends 

uFPEasmuasrsosorenncsoPTxas* 


Price 

82 

B4 

a 

88 

90 

92 

94 

96 


before the outcome of talks 
within the US admin Istration- 
over attempts to cut the budget 
deficit and the release today of 
US trade figures. 

Most traders are expecting a 
deficit of around $14.7hn com- 
pared with Sl5.68bn in August. 

The December contract opened 
at 39-07 and traded between a 
high of 89-13 and a low 8880 
before finishing at 89-11, the 
same as Tuesday's dose. 

The FT-SE contract opened at 
158.00 for December delivery up 
from 155.60 and touched a low of 
158.00 before dosing at 163.25. 


Dk tor 

722 721 

124 255 

331 437 

1U 331 
05S 237 

024 135 

Oil 119 
005 057 


Pmtoui *** epea he CM 2958 


Dee 
ooo 061 

n ro i Tl 
012 213 

040 307 

136 433 

302 531 

433 639 

6.47 833 

ait 
Ms 2091 


unr rrse. uc mua mutts amom 
Strike CaBs-Laa Pat-Last 

Price fee Dec Nor Dee 

1S0W 074 411 17.49 2006 

18250 051 IS 1936 77 nn 

18500 035 336 2210 2431 

13750 024 263 24.49 

19000 016 225 26.91 2930 

19250 OID L9Z 2935 307 

19500 037 1-63 3132 3338 

19750 004 13B 3439 3563 

M—N riU MtMhUfai 

MudeTiaiHlK Cafe 77 Puts 147 


LDTEOSamONS 

cnON(ieritwra) 


UH0N SE E/S OPTVMS 
naswintopBO) 


Strike Cto-Ua 

Price Mo* Dec Ja 


150 

27.90 

27.90 

— 

27.90 

nnn 

0.00 

_ 

007 

135 

22.90 

22.90 

2190 

2290 

060 

nnn 

004 

022 

160 

17.90 

17.90 

17.90 

17.90 

n nfl 

0JJ1 

037 

037 

165 

12.90 

1290 

1297 

1357 

nnn 

Oil 

036 

128 

L70 

7.90 

012 

as7 

961 

060 

034 

146 

252 

175 

300 

438 

533 

43X 

023 

180 

332 

442 

160 

025 

190 

330 

435 

258 

452 

569 

746 


Xrte 
Price . 

Nov 

Crib-Lst 

Drc Ob 

tor 

Not 

Pt4S-LM 

Dk ton 

Mar 

145 


1293 





270 

— 

MM, 

150 

am 

2060 

— 

2060 

050 

030 

- 

050 

135 

ss 

2960 

__ 

2195 

030 

030 


030 

160 

18.95 

16.95 

1960 

030 

030 

030 

040 

165 

13.95 

1160 

1195 

1445 

030 

045 

0.70 

155 

170 

865 

860 

960 

1045 

030 

090 

140 

240 

175 

170 

530 

395 

660 

0.45 

190 

100 

4.00 


_ , )teai,C*tts2Pta»2 

PteriSM d^f*s open be CafeZ75 Pats 1411 


iWAPrisN/A 

Prrrieas fey's cpn be Cafe 838 Pots 337 


tajmtpmk 


ssr 


UFFK- EU8088U4B SmSKS 
oapHirfUK 


Price 

tor 


Jn 

tor 

Nor 

Dec 


tor 

1650 

2330 

1230 

1345 

1175 

— 

l^pn 

060 

.is in 

1675 

1080 

1085 

1125 

1165 

005 

1035 

090 

L5S 

1700 

830 

820 

935 

9.75 

005 


LH 

?M 

172S 

170 

660 

740 

830 

005 

085 

185 

270 

1750 

120 

4.75 

5.75 

635 

030 

150 

260 

465 

1775 

115 

140 

4L» 

120 

030 

230 

190 

480 

LBOO 

030 

205 

280 

420 

175 

460 

4.95 

635 

Eritotori whew tot* Crib 4329 Ptts 7^78 
PmtBB (tors cfm tat Cafe *S3W PMsltS.447 





276 266 239 SR 

251 242 Z17 L99 

226 229 2.95 2.79 

2.01 1.96 1.75 160 

176 174 133 132 

132 133 136 L25 

33 LS LU L09 

MwulGasOtaO 

Protects open M: Cafe 2702 PrisZ369 


8075 

9000 

9025 

9030 

9075 

91.00 

9L2S 


nnn 

nnn 

030 

OOO 

000 

001 


tor Jm See 

004 013 029 

035 016 034 

007 0J9 039 

039 024 045 

012 029 032 

016 035 060 

020 0.42 069 


CURRENCY RATES 


i j 

Baric 1 

Spedal , 

^ - 

1 Hw31 

rat* 1 

Dnariog 

Oareacy 

- | 

% : 

Brin* 

ltoO 



IT I M 


U3fefcrd 

6” 


12379 

f „■ J 

875 

■ 

- 163137 

Austrian. Scb-_ 

4 ■ 

-U898S 

145081 

Briiltaa Fr*m. 

F 

H/A 

'03543 

Dari* Kra* 


7.95329 

DeulscAr Marie! 

3 : 

22587 

jf+T-m 

Nfth.GflDdW„ 

41* 

W6 


FreadiFnac-j 

91j 


780087 

haHanUra—. 

12 


151944 


2»j 

18235 i 

166341 

Nornay Krone . 
SanaMPtMA 

a 

ISg^H 

787532 
138609 ' 

SmUKron 

7h 



Swiss Frame 

3 


160929 

- Gnefc Brack. - 
lrisbPmn-3— 

2»a 

Bm 

0775716 ' 


-CVSOft nbr far 179780 


CURRENCY MOVEMENTS 


Har31 

Fafltanrt 

Into 

S2S. 

Ctoajja& 

33S3S5S 

75.4 

963 

776 

1422 

ML4 

946 

15L0 

180.7 

1393 

723 

474 

2283 

-187 
-103 
-116 
+108 
-47 
♦25 
+214 
♦258 
• +19L4 ■ 
-234 
-ia7 
♦717 

'i' li wSto" 


ctaaan: ai 

tatoa 

uni mes hr 

RENCIE 

IMP 1980- 

(BaK Amp 
No*30 

s 

Hea31 

! 

$ 



70240-72160 
, 26135-2.6165 

__ 4102210-102800 

t 1 73205-73425 

23235-23605 
12.9045-12.9215 
12120 * 

1419.70-143235 
049250-049300 
61-95-623$ 
4.4403-4.4530 

66730-66780 
36370-36455 
34940-15U0 
5.7915-5.9870 
5335-5335 
63385-63445 


4300(640 5 00 

14635-13645 
573870-576740 
4J12MJ140 
13035-13225 - 
73055-73065 
6730* 

7953030170 

027675-027685 

3430-34.90 

24940-24955 

168600-168730 

16050-16090- 

32480-3.7485 

2D425-2OW0 

19685-19725 

32520-33615 

29.75-2935 

36725-36735 


Nm31 

IHES 

ck m 

■'Ll 1 ". ■ 

tj 

IO 


IMt 

C«ato 

SeStoZL 

DSSk__ 

trebad. 

W.Genm* 

sSS- 

Italy 

frm* — 

F EMC* 

Swaton — 

tSL— 

SwtoeftMd 

17775-17890 

23412-23566 

334-336 

6L95-624B 

1147-1131 

13179-13230 

19971-200.79 

2181-2200 

1134it-1139% 

1069%-1033% 

W1H79 

' awSo.99 
2431+245% 

171853.7795 

2J*3S-23**3 

29^296\ 

24080-24180 

20005-20035 

- 244-2.45 

l| 

Vl 

CVr 

i- 

1 

MS 

045^ 

313-406* 

15-22* 

H 



briri toltri 14. 

DOLLAR 

S-llOcpm 

Mn31 

KJR 

CKM 

i3d 

m 


Ul 

met 

iMtmt— 

gtotoj-^ 

Stria , 

^ 

Aawe 

ffarrim 

1 

17785-17795 

13850-13860 

13165-1-3175 

18890-18860 

3480-34.90 

646646b 

13755-L67& 

136^137 

1179-1179^ . 
L3745-L37SS 

■ 

-187 

183 

02 

•299 

U 

-5l30 

-9.09 

-057 

-7-97 

-36Z 

-159 

nr 

.215 

427 

06303/ 

054-044pM 

047-050* 

115-130pa 

660-lOOna 

190460* 

147-lcan 

1705)0* 

190-240* 

1360-1600* 

100-130 

285343* 

137 

240 

040 

-265 

347 

-589 

-767 

-4.73 

-739 

-223 

-2QZ 

331 

247 

168 


’ thrill ' 

: tori . 
Km 

mi\ 

o 

Taw 
.- torikl 

MMtiB 

Ow 

tor 

Sterito 

US Polar- 

ftGultor THZ 
jltftMC .. i 

Fr. Franc 

Itrital UN — — _ 

OFr.tfM 

8. Fr. (Coo-> 

D. Knar 

. AUm SStflO — 

s 



; g- 


| 


msMi 

D 

■B] 

13 

a 

133 

D3i 

oa 

a 

CS 

_8^J 

8 . 

5 

0562 

m 

2983 

1676 

2405 

1353 

n 

2445 

1315 

m 

m 

2344 

1318 

LJI 

Ml 

rot 

0335 

4358 

0596 

7397 

1 

1240 

8064 

um 

C3 


1425 

13.95 

7360 

9122 

0786 

9.746 

2079 

2578 

FFr. 

8Fr. 

0989 

0409 

m 


m 

10. 

4136 

m 

3318 

1372 

2171 

897.9 

KHI 

6131 

2936 

HA 

tin 

0898 

0456 


0889 

1389 

7168 

1096 

3SM 

4607 

0729 

1114 

Q 

£3 

m 

El 

CS 

BFr. _ 

0427 

1619 

ii_j 

1272 

4810 

1026 

387.9 

4314 

1631 

1043 

3,944 

1481 

54U 

9365 

3541 

L 

3381 

2645 

UO 

Yea per 1,006: Track Ft. tri 10: Um per 1600: Hririf ft. ptf IPO 1 


LONDON 


YE*an % wniMii 


CHICAGO 


ax. TtEAttnrr nats (citj *% 

anpo aasxw 


JAPANESE YOt (I KM) 

Y123bXP»Y188 


Dec 


Cto*» tflgk Low Pre*. 
122-29 123-12 12230 124-16 
122-24 12341 122-10 124-U 


30091(40406) 

Piwtos Wi apea la. 90664 (29699) 


MU Plate 18 Mm« 188% 

















| <V | 




* M 

■ ' ■ 





&W® * Wr 

■ 

I - J- i 1 

1 4 1 












■ . . ■ i M 









new Lo- Ptw. 

0.7425 0.745 02423 07447 
07484 07515 07484 0.7510 
C.7552 07560 07552 07573 
07626 07626 07626 07636 
- 07699 


Dec 


Ctae High Lm Pm 
106.90 10732 13665 10007 
UUO intx lisx J07JO 


sar* 


83-20 

8307 


Estinotod Vbfeae 479(431) 
Pitriaos tv's opte >4.537 (571) 


83. TREASSKT MLLS (tfel) 
Slrip*ferilS0% 


TMS£ MSRnt STE8UHB 

etunpWirim 


3E 


Cte* HJ* Um P«*l 
9132 9148 9128. 9LS6 

902 9144 9128 9156 

9U9 9125 9102 9143 

9100 9130 9091 9 LJB 

9035 9035 9035 9135 


tor 


£ 




9M8 

9X75 93L75 9172 

9336 9336 9334 

- 9331 92.99 

9171 - 9071 


Pm. 

9432 

93.78 

9339 

9335 

917b 

9234 


7774(9219) 

Prerians da's epee lot 19942 (9689) 


SWISS FUK (tap 

SfyUSjMSparWr 


PT-SEU0B 

DU 


OStarMI 6 priH 


Dk . 


Picv. 

155A0 

tor 


16041 

- - • ■ 

■>1370588 


Pteriaai (%'s 

epee iri. 9002 (8985) 


IWSEHri 

n iTi— 


TlMtH*atlk8% - 



Dk 


Jn 

SW 


CM* HI* Lm Pm. 
07313 07360 073U 07354 

07373 07420 07373 0.7417 

07490 - 07535 0.7481 

- - - 07555 




m 

22j 

hrrr^ 



W- "^1 





■ lil 

r 1 1 




K Ir| 





B J 1 


K i ^ 1 

■ J.T 




■ 1 W - J 




K • R ' 1 

■ it ll 








| i 1 

K T_1 


B ,T 







r t—i- 













r % 1 1 

p TT l T1 

FT» J ■ • 1 

pi X i 







F ’ •! 

V * ti' 1 

K:/' >1 








SYSTEMTREND 

LIMITED 


UP AGAIN 
IN OCTOBER 

GAIN FOR OCTOBER + 1 0.9% 
GAIN YEAR-TO-DATE + 50.7% 
GAIN FROM INCEPTION + 1 14.7% 

(07.0&84) 

• SYSTEMTREND has gained steadily since 
inception from the strict application of 
systematic, trend-following, trading models to 
approximately 50 futures and options markets 
world-wide. 

• SYSTEMTREND can profit equally from falling 
m ar kets through holding a spread of short 
positions. 

• SYSTEMTREND is managed by Alexanders 
Rouse (Bermuda) Lid, a wholly owned 
subsidiary of Credit-Lyonnais. 

For further In formation please contact David EBdn. 

Alexanders Rouse Limftsd, 

Intel na tional House, 1 St. Katharine's Way, London El SUN. 

Tel: 01-481 2121, Tbc 8950831. Fax: 01-480 5588 

Please send a prospectus to.'- 

Name 

Aritfcww 

Please telephone me on 


The acfceribamflni doss net constitute an oflBriorsaiB of orsitecriptionlDrstaras 

riSyatoriiarounftBdApp tato i a tarahOTalnSv st BrnB tt 'KiUmltaaiMibB 

ccnaiaBrad on fta wm e etithBRo sp e ntiM bi ' iuedCv the Company and dated 

28 Juna 1984. In tha UK the Pmapacus may orty ba dreuteod to panons whoaa 

anftwybualnaakbtDDwwaectwMwdabamnstMhaharaspaioipalaraGBrq. 

8TLFT2B7 


Personal 


ASTROLOGICAL MAPS OF LONDON 
ANDTHEUJL 

Maps d»wii« different ceataeaB of Lonfeii and the UiL mled by dificrent 
Bpu are now available far tbe first time. 

These will help yon to choose the right place to live and to work 
haraioaioMly. 

Price £5.00 per map. 

Pfcue make cheques payable to Astro Markets Inc. 

50 Pcnywern Read, London SW5 9SX. 


La INDEX LTD, 9-11 GROSVENOR GARDENS, LONDON SW1W OBD 

Tab 01*828 7233/5699 Reuters Cods IGIN. IGK> 


FT 30 TTSE 100 WALL STUEET 

Nov. 1281/1296 -1-18 Now. 1620^835 +30 Nov. 1895/1915 +25 

Dm. 1285/1300 +18 1 Dec. 1625/1640 +30 1 Dec. 1895/1915 +25 

Dealnc hours from 9am to 9pm. Prices taken at 5pm. 


9231 9155 9230 9156 

9237 9140 9135 9C 

9101 9236 9100 SC 

9L65 9169 9166 9166 

9L30 9134 9130 9L36 

9100 - - 9US 

9068 • - - SO.Sfc 

9031 . 9079 


hnta dWs ayta lit. 38920 OOZU) 


03. TRCAfiflrr 


■% 


(Su aw! 

88-12 88-09 8809 


2317(8621) 

Mas tor* span as. 9433 nun 


CURRENCY FUTURES 

roe«Mi 


PTML 


13^0 


1775T 17729 1MT7 17630 


■W BHaeifl 


toe 17775 178$ 17770 17805 

L7700 L7785 17695 17765 
17650 17750 17650 17730 


UFFUftaUM <2*808 Saw*" 


. Om HWi Law tow. 

0*c 17758 1705 17761 17837 

tor 17709 17802 17772 17792 

f!?i i a m Mrt n 1MtS r7M5 1,7755 

Picrinsto/topM ha. 175 070) 


MONEY MARKETS 


FTLONDON INTERBANK FIXING 


UK money rates 
slightly firmer 


aiOO ul tpritll)- 3 ritotiB OS totos 

• 6 aa 

toUSMBril 

kH 7M p c&r V, 

W 71 . 

~\ «rr 7i 


Thfttoieawto a ewl c si wisto aaitiiMMw 
SUfe fay to art* ts fiw wtMcr feats >1 1100 jus 4 

Wstowlto Batoto Ttoto oeart* B*to, Bmpt MMtoa i 


INTEREST RATES were a little 
firmer in the London money 
market yesterday after a rally in 
the equity ' market removed 
hopes of an immediate cut in UK 
clearing bank base rates. 

Three-month interbank money 
was quoted at 8%-8% px. com- 
pared with 8*^4-894* p-C- Over- 
night interbank money was 



balances were taken up to 9% 
P-C- _ 

UK clearing bank base 

lending rata 9 per cant 

from Novembers 


Market sentiment had been 
influenced to a large extent bv 
the last foil in base rates 


there was a feeling that the 
authorities* hand ead been 
forced by further falls in share 
prices. Consequently yesterday's 
rally produced the opposite 
effect 

The Bank of England forecast 
a shortage of around 5500m with 
factors affecting the market 
including the repayment of late 
assistance and bills maturing in 
official hands together with a 
take up of Treasury bills drain- 
ing 5589m and a rise in the note 
circulation of 5120m. These were 
partly offset by Exchequer trans- 
actions which added 590m and 


banks' balances brought forward 
5205m above target; 

The forecast was revised to a 
shortage of around 5450m and 
the Bank gave assistance Ijn the 
rooming- of 567m through out- 
right purchases of 551m of eligi- 
ble bank bills in band 1 and 
516m. in band 2 all at 8% p.c. 

Further help in the afternoon, 
totaled 5407m and was made up 
of outright purchases of .51 22m 
of etigiblfTbank bills in band 1 
and 5286m m band 2 all at 8% 
p.c Total help came to 5474m. 

In Frankfort the Bundesbank ; 
accepted bids of DML1 -8hn at 
yesterday's sale and repurchase 
tender, more than had generally 

been expected. The lower fixed 
rate of 2£> po, down from 35 
p.c., had already been 
announced and underlined the 
authorities' apparent detemdiutr. 
Mon to hold down the level of 
domestic interest ‘rates. 

The 28-day facility attracted 
bids of DM47.4bn and went a 
long way to replacing maturing 
facilities of DM11.8bn. The net 
DM2bn outflow _ was 
to pose few problems .because* 
■continued cental bank fatejven- 
tion in currency markets, mainly 
to support the dollar, meant that 
a considerable volume of 
D-Marks were finding' their way 
back into the domestic money 
system. . 


MONEY RATES 


NEW YORK 

UocMne 




- Ttooi 

8.73 Unci 

7.73 StX I 


(to DK|*>. 
S Umjmt. 


455 
- 478 

581 

Ttoteyrar. 

— 

733 

ai4 

-M8 

649 
687. 
781 ’ 

Smayear 

. Riil 

-637 


HneJl 

Owntat 

Ow 

Morib 

Two 

IMs 

Trie* 

Darito 

St* 

Marti 

Luitoriii 

tori* 




380-295 

385-400 




980 


9L00 

9LQ0 

re 

M 

; too 

2625 

3425 

5J0625 

• - 

Bte— ; - 


384375 

10875 

■ : ' 

296875 

tiws 

• 


bOTOTk 

630 

275 

675 

8875 

200 

70625 

9425 

9375 




LONDON MONEY RATES 

toUO 

Omni* 


Om ' 
Mtrik 

Tkri 

Ifexokt 

St* 

fen* 

Oae 

Year 



ECU) 

■OEJt 


i , 0iflJre»B*&2e77 

_ 

^]^CTl»SS^5TM^a 5riV? |5^A?L3tottBrift.wdHDaKcllMBC4W«4«totf 

Wft Oton w wtof ftgd FtoM Hub B m 8m lflj (m WOVeMBgR I , Mg7i Emk Dgtot 
teVor n m m nrito 3*5 pvaatGritotoK tf Tto DtoKti (Soto U; toped £1055» 
toMWdctoNtmMt 7jMf M MC (tof. w wto ABO pqart; ttoto jbbMb 100 (WRj 
to-toe mtfac ire etet; ab»4w«KWoatiB&00MMng|togto|||||to«^Hri 


i Voder 000,000 M» per wd 


BSN 

hmp e nm i i wrfi S mile d BnMjy mAeStpMctfftmte 

Share capital: FF496,909^00 
Head Office: 7 rue de TBieran - 75008 Paris, France 

NOTICE QFMEETINO 

SJiarrtwil deg are hereby lufuiiu ed that an Kxtiao i rdhmg y Ge n e r al Meerir^wiD behddat 
the head office of the Company at 5pm on 27th November; 1987 and, if a qu or um is not 
present at that Meeting on 16di December 1987 tocomnder thefnDowing agoxda: 

- PigaCTBannoftbcieporeofdicBoardc^EfacinrioftbcStamgwyAm&msandcifihcConrribimnn 
Appeaser; 

- Contribution by die com pany H3 Hnanaaria IX Pa n e rip cioni of aa in weett m die co mpany Ifil 
Pairrriparirmi; 

- Mo^erofBSN with Ac comp an y Rogmot by vbht of ahroqaioQ of die htcer, 

- ba^iptfaediamopiBlanaatpmmiemofAitii&dofdieAtndboflbcoipotaaxi; 

- Elrorion rf ad d irinnal Direct or s ; 

- Audwrianoniu (he Board ofDitectPS to asretondrahleaeariritt cm one at mote onra rions, i n fianoe 
or oro ai , giving agfais over Acres equrwknr to an inarase in share capital of op to BF75 imllion; 
rrooDca(kio^ sh a igh oki m c£diegprd6^nalri^mrosabsciibcforsodit ra n8 &iabl e s«min e s ; 

- Review of the company^ objem and ameadincm of Artkfc2of die Ankles affaagpoation; 

- T nirrM4nf-ry >i7 rf» Ai- tv-I/m; rtf a pfrurp ^ ryn malting riv prwripany tr\ rtv» j/Witrty nflv-wr 

dtaresamendmettofAiiichlOc^i^Ankhtonnaxpanikm; 

'Img 


ptli^r n fn p apy rv to ny tv m lrtpl^ Altjrfcll 

fdie Axtides oflacatpoadom 

- AmeraWnt of Anidc 34 rf rbe Artida of Incorporation relating to die powers of shareholders in 
Geneod Meeting to approve paymmrofdivklexids on shares; 

. - Itowm of attorney mr carrying out formalities. 


lb beootided to attend or id be repreremed at die Meeting; 


of (be 

- hoMeg oftesagy Aww mare Aycat at the head office of the company Or at a branch of the tnstiiuaons 
fisted bekra atleast five Ays before the date of tbe Meeting a certificate evidencing that die shares hare been 
deposited with authorised intermediaries until the date of the Meeting: 

lazaxd Brothers ArC&, Limited, 21 Moocfidd^ Loudon ECZP 2HX ENGLAND. 

LazaidRrhesetGfcia boulevard Hatwgimm. ^5008 Fans. FRANCE. 

RanqueNantHuleaeRzds, 16 boulevard desloKens, 75009 ftris,KlANCE. 

Criduimhistridet Commercial de Buis, 66 roe de la^ Viaraie, 75009 ftrii RIANCE. 

Butque Dtonachy et Asmcifo; 2Z3 xne Saint Hanoi, 75001 Rais, FRANCE. 

“ jueTxataadailQque; 17 boolevardHausanann, 75009 Paris, HtANCE. 

i LytauretedeBanque; 8 rue de b Rindjfiqtie, 69009 Iyun, RtANCE. 

Mutoefle Iruiustrieile, 55 rucla Bo^ce, 750C6 Pniis, H1ANCE. 

Hamjiig TntUBiw, Ori WmW wl Hmwiiann, 7^008 fork, HI ANCT_ 

BanqueRoibai 3 rue d'AncirL 75002 fbris, FRANCE 
CrfditLTOcnjtis, 29 boulevard da Izaheffi, 75002 Faxis, FRANCE. 

Sodtifc Gfnhale, 29 boulevard Haussnann, 75009 BtANCE. 

Cihlitdu Nani 6 et 8 boulevard Haag m a nn . 75009 Paris, H1ANCE. 

BfiaquedeNeuflize, Scfalumbema; MaBet 3 jncnueHoche, 75008 Rni^ PRANCE. 

J.TbntDbdet Qe,Balinhofitp ae3,Zntid lgn ZERLA>BX 

A,!^m 4t nft | 1<B' fiwi < » i3 « i ( Bale,slfrii6ii KLAND . 

Iqa l re dO& r ct Q^ ll C iMno e a^ GenwauSWnZBMAND. 

Any ibsebolda widths to aoend the Meeting in peam dxnld request an adnnswm card fizan one of die 
hanks listed above. 

R»n>c with the Company at feast fhc days before the date of die Meeting. 

Anodia person only icpcesem a dtmioldcrar me Meeting ifhe is hmadfamded to attend die Meetii^, 

oristfac^>oaseorl^aliepieseotariveotchediareholdffi 

Qwks <rf die naolutiOQS to be subtnined to die dsaodtokko at the Meeting may be obtained &can die 
office (rfLazardBrodtas 8c Co, limited!, 21 Mbrafidds,Lcodon£C^2HC 

Le ComtiliAJ mmstaUm 




i 

















































































34 


0 Financial Times Thursday November 12 1987 


WORLD MARKETS 


FT UNIT TRUST INFORMATION SERVICE 


' 0 * 


FT-ACTUAR IES WORLD INDICES 


Jointly compiled by the Financial Tones, GoUftnan, Sachs A Co^and IMhtahftft 
IM, hi conjunction with the Institute of Actuaries and the Faculty of Actuaries 


NATIONAL AND 
REGIONAL MARKETS 


Figure in parentheses 
SbOw number Of Stocks 
per grouping 


Australia (89). 
Austria (16) 


Belgium (46) . 


Canada (127). 


Denmark (38) . 


France (120). 


West Germany (93) ■ 

Hong Kong (46) 

Ireland (14) 

Italy (95). 


Japan (458). 


Malaysia (36). 


Mexico (14). 


NeUreriand (37). 


New Zealand (Z3). 
Norway (24). 


Singapore (27) . 


South Africa (61). 
Spain (43). 


Sweden (34). 


Switzerland (S3). 


United Kingdom (332) . 
USA (582). 


Europe (947). 


Pacific Basin (679). 


Euro -Pacific 0626) — 
North America (709) — 
Europe Ex. UK (635) — 
Pacific Ex. Japan (221). 


World Ex US (1828) . 

World Ex UK (2078) 

World Ex So. AF. (2349). 
World Ex Japan (1952) — 


The World Index (2410). 


WEDNESDAY NOVEMBER 11 1987 


US 

Dollar 

Index 


85J30 

88.66 

9859 

9856 

10851 

7739 

7X46 

78.75 
9620 

72.76 
12735 

9935 

198.92 

93.47 

79.19 

104.47 

9230 

11846 

120.65 

8850 

7636 

118.09 

96.75 


94.79 

123.79 

112.22 

98.74 

8032 

83.17 

11X87 

105.67 

10649 

97.02 


106.77 


Day's 

Change 

% 


-6.4 

-Z.9 

-0.9 

+03 

-05 

-04 

+3.7 

- 0.4 

-OX 

+89 

-33 

-35 

+3.4 

+64 

-25 

+83 

-31 

-04 

- 2.8 

-0.7 

+3.7 

+33 

+L1 


+23 

-35 

-15 

+L1 

+13 

-3.9 

-15 

-0.9 

-0.4 

+X4 


-0.4 


Pound 

Sterling 

Index 


7X50 

7339 

82X7 

8214 

90.43 

64.49 

5955 

6543 

8017 

6044 

105.96 

8X21 

165.78 

77.90 

65.99 

87.06 

76.92 

9839 

10055 

73.76 

6344 

98.41 

8250 


78.99 

10316 

9352 

8228 

66.94 

6951 

9X23 

8837 

88.91 

8036 


88.98 


Local 

Currency 

Index 


8354 

7720 

8510 

93.99 

9557 

69.01 

6Z27 

78.92 

85.49 

6736 

108.71 

95.94 

36630 

80.44 

6757 

9057 

86.90 

85.76 

10233 

79.40 
6510 

98.41 
98.75 


8150 

106.72 

9658 

9850 

7057 

80.77 

9654 

9753 

97.46 

9X71 


97.40 


Grass 

Dfv. 

Yield 


454 

2.72 
543 
358 
312 
450 
338 
618 
554 
237 
044 
3.74 
031 
541 
440 
3.04 
2.78 
4.98 
4.02 

2.90 

257 

446 

3.73 


414 

036 

X97 

3.71 

346 

511 

2.05 

2.42 

243 

3.9X 


245 


TUESDAY NOVEMBER 10 1987 


US 

Dollar 

Index 


9X69 

9151 

99.45 

9834 

10938 

7733 

68.91 

7935 

9650 

7211 

13X49 

10358 

192.44 

87.70 

8132 

9633 

9550 

119.41 

12438 

8913 

7345 

113.77 

9746 


9225 

12835 

113.76 

9749 

7839 

8654 

11353 

10642 

10716 

9544 


10734 


Pound 

Sterling 

Index 


7611 

75.79 

8255 

8X63 

9055 

6441 

5750 

6542 

79.94 

5936 

109X5 

85.74 

159.75 

7230 

6735 

79.72 

79.03 

9913 

10330 

73.99 

61 13 
94.44 
8137 


7657 

10629 

94.43 

8139 

65.49 

7134 

9438 

8851 

88.96 

7959 


89.02 


Local 

Currency 

Index 


8930 

7837 

85.10 

9X99 

9525 

69.01 

59.65 

7924 

8436 

6632 

m.79 

98.95 

356.75 

74.94 

68.95 
8258 
'8945 
8631 

10431 

79.47 

6252 

94.44 

9746 


7849 

10932 

9739 

97.47 

6834 

8427 

9731 

97.90 

9758 

9026 


9752 


DOLLAR INDEX 


AUTHORISED 
UNIT TRUSTS 

ft* 

Altar Ox* Ttt.Nnga.fr) 
aOMfetam At BarnmMl 


.-LMfr) 

WtalWir* W« Wft - iw 

INM TM rsr H 24 —lira 


1987 

High 


18031 

10237 

13439 

14X78 

12433 

12X82 

104.93 

15846 

16022 

11211 

16128 

19344 

42259 

13X41 

138.99 

185.01 

17428 

198.09 

16841 

13644 

11X11 

16237 

137.42 


130.02 
158.77 
14345 
13755 
11X97 

164.03 
14338 
13832 
139.47 
13422 


139.73 


1987 

Low 


8530 

8553 

9619 
9815 
9833 
7739 
68.91 
7532 

9620 
7234 

10030 

9824 

99.72 

87.70 

7836 

9633 

90J.9 

10030 

10030 

8850 

7345 

9945 

9283 


9225 

100.00 

100.00 

9320 

7839 

8327 

10030 

ioaoo 

100.00 

9544 


10030 


Year 

■go 

(approx) 


9X41 
9330 
94.91 
10038 
9321 
- 93-46 
9253 
8712 
90.71 
10122 
9050 
10045 
9338 
9614 
9435 
10440 
. 10X44 
10651 
83-98 
10439 
9L07 
9541 
10247 


9433 

9053 

9223 

10239 

9436 

9039 

9248 

9659 

96.43 

9936 


96.49 


Bast mine Dec 5L 1986 ■ IDO 

Copyright, The Financial Tines Crtdnue, Sads & Co, Wood Macfceade 4 to LUL 1987 
BrigianvCraSaa Md Fieadi markets w> dosed for (wMc tedders Noventar 1 L 


EUROPEAN OPTIONS EXCHANGE 


BASE LENDING RATES 


Series 

| No* BT ) 

( Feb 68 | 

| May 88 j 

Stack 

Vd. 

Last 

VqL 

Law 

Vo). 

Last 

GUU) C 

5460 

253 

78 

16 

27 

_ 

— 

546310 

COLD C 

$480 

66 

120 

68 

19 

— 

— 



$400 

10 

010 

62 

450 

— 

— 


GOLD P 

$420 

15 

0.70 

268 

670 

133 


* 

GOLD P 

$460 

67 

550 

tara 

— 

— 

— 


GOLD P 

$480 

401 

22 

255 

26 

30 

30 1 



ABXBa*. 


Nov. 87 


Dec 87 


Jm. 88 


EOE [n 6 ei C 
EOE Index C 
EOE Intel P 
EOE Index P 

sm c 
vine 
$/n c 

VF 1 c 

VFl P 
son p 
vn p 

VFl P 

VFl P 

FI 180 

FI 185 
F 1165 
FUSS 

FI 185 
FI-190 
FU 95 

FI .200 

FI 180 

FI 185 
F 1.190 
FI 195 
FL 200 

190 

63 

81 

89 

00 

24 

93 

54 

53 

210 

1450 

410 

2 

0-50 

~1 

3 

670 A 
n an 

370 

610 

281 

55 

11 

185 

219 

120 

103 

109 

451 

165 

252 

9 

7-50 

1050 

20 

550 

3 

1.40 

0.80 

« 

3.90 

7.70 

1 X 70 

146 

12 

41 

101 

22 

169 

65 

70 

11 

118 

220 

17 

26 

950 

730 

12 

22 

5508 

4 

XBO 

1 

2.40 

3308 

530 

920 

1350 A 

FL 17038 

FL 18 B 50 

w 



Mar. 88 

Jin 88 

Set*. 88 



F 1190 

37 

4.70 

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550 

— 

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42 

210 

4 

2-80 

131 

330 



FI -205 

75 

L 20 

4 

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42 

zoos 



FI 100 

50 

330 A 



300 

6.70 


son p 

F 1185 

17 

5 JO 

7 

730 

1000 

am 

" 

VFl P 

FL 200 

37 

15 

— 

— 

— 

— 



Mw&Cogpioy 

AEedMBkUd 

AIwUMnr&Ca 

AltadiriABart 

AmraEg-Bk 

Amo Bade 

Ue«y ABdacber 

AKZBsUngGm* — 
AmteiCteCarp — 10 

JkltailflCaljd 

BaaxfcBtoi 

BartHapodii 

BartLmlUK) 

Bak Credit A Coen 

Battkof Cypns 9^ 

Btaodretat 

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ten. 88 

Apr. 88 

Jd 

88 



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0-80 

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FI 3810 


F 1.40 

467 

3 l 60 

96 

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150 


— 

FI 3520 


FI 30 

1 

2780 A 

ion 

2730 A 

— 

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99 


FI .100 

32 

3530 





— 

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864 

530 

112 

10 

5 

11 

FL 8750 


FI. BO 

603 

4506 

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730 

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FI .40 

13 

430 

113 

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88 

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212 

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28 

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F 1 J 20 

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14 

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394 

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395 

630 

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Bones WgeTa 

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fttat Fastr iPtn — , 10 
9 


% 

9 
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HntoGeaTiA 9 

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ProrittVTrwUd , 10 fc 

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KmtagkeG'rarat 

RotriBLoT Scotland 9 

tor* Trad Bart 9 

SnttiWftnSss 9 

SnrindOnrtmrf 9 

TS 8 9 


91* 


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• Gamas Him 

HFCTrwt&SaraU — 

• HninsBart 

Heritable tGraTsl 

• HD 


CHnt&CO- 


HoD^ng&Steto — 
UqdiBart 


HertrajASomUd — 
MUMBnk 


• IfcqmCraMI- 
Mt Craft CpnLW- 


9 
9 
9 
9 
9 
i 9 

9 

9 

9 

9 

9 


UOTtotmeEra *1)1 

Urted BkiKnmil 9 

Haled If izrai EM — 9 ‘ 

UrtyTratPLC 9 

Western Trail 9 

WtsmctodLCorp 9 

WfetataLiiM 9>z 

yortaMcBart 9 


a Members of. «* Accepting 
Houses Committee. * 7 -day 
deposits 4 %. Sntwke 666 %. 
Top Tier — E 2 . 500 + at 3 Mootin' 
nutlet 831 %. At cart taen 
£ 10400 + remains dwmtud. 
4 Mortgage Ease rate. f Dcntmd 
deposit 3 . 94 %. . Motme 
11425 %. 


TOTAL VOLUME IN CONTRACTS: 51003 
A-Ask B-BM C-Call P-Pm 


FT CROSSWORD No.6,480 

SET BY DANTE 

IF 





SCOTLAND 


The Financial Times proposes to 
publish a Survey on the above on 


FRIDAY 

4th DECEMBER 1987 


For a full editorial synopsis and details 
of available advertisement positions 
please contact: 


KENNETH SWAN 
on 031-220 1199 


or write to him at: 


37 George Street, 
Edinburgh EH2 2HN 
Telex: 72484 


FINANCIAL TIMES 

EUROPE'S BUSINESS NEWSPAPER 


M 


u 


12 


13 


ACROSS 

A fault not long showing up 
( 11 ) 

The boozer turned up with 
a bottle opener (3) 

Nitre, perhaps, put into the 
ground (5) 

Sweetheart to approve a 
new tie (9) 

Take action that’s repulsive 
(5,4) 

Give Heather a ring - but 
mind your language (5) 

__ A gem of a green (7) 

15 Pole to feel sick on voyage 
(4) 

18 He’s a reformed Wimble* 
don champion (4) 

28 Allied company takes on 
new agent (7) 

23 Children of Susie? <S) 

24 It sounds straight (5*4) 

28 They deal with many 
dogged policemen (9) 

27 Bath’s sex appeal girl j (5) 

28 A well-cut length of cloth? 
(3) 

29 Camille is upset about an 
unsuitable marriage (11) 


4 Not on dnty the worker is 
casual (3-4) 

5 Raises petitions (7) 

6 Draining liquid food served 
with fish (9) 

7 It is involved with a plan 
that Is Flexible (6) 

8 One from France takes the 

14 Port for mother after morn- 


18 Understood vessel could be 
reserved (8) 

17 Eat green fresh produce (8) 

19 Quick to declare (7) 

28 Advice on clues in anagram 

form (7) 

21 Band in the theatre (6) 

22 Republic is setting up a 
king (6) 

25 Singers of low songs (5) 
Solution to Puzzle Ncl&479 


DOWN 

1 There’s a certain wildness 
in such devious dealings (8) 

2 Stranger not fancied by 
many people (8) 

3 All-male crew of a novel 
boat (5) 



rc 

R A N V I L L E : 

! SPONSORED SECURITIES 1 






Groat Yield 

High 

Law 

Company 

Price 

Chew <8v.(|i> 

% P/E 

206 

133 


200 

_ 

8.9 

4-5 7 JS 

206 

145 

Ass. BiiL ImL CUES 

200 

— 

10J) 

5.0 — 

«1 

■ 32 

Armitage & Rhodes . 

32 


4.2 

133 4JS 

142 

50 

BBS Design Group (USM) 

50 

+10 

23. 

4J. 8-0 

138 

108 


163 



2.7 

1.6 27.9 

IBS 

95 

Bray Technologies 

164 

+1 

4.7 

2.9 m 

281 

130 


264 


1LS 

4-4 6J5 

147 

99 

(XL Group 11% Conv. Pref. - 

135 


15.7 

1X6 — 

171 

336 


156*d 



5ft 

3.4 13-6 

304 

91 

Carborundum 75% Pref. 

104 


10.7 

103 — 

180 

87 


156 



3.7 

2.4 4-0 

143 

119 

Ids Gram 

92 

_ 



. 

UK 

59 

Jackson Grow 

98 

_ 

3-4 

3-5 10.8 

780 

320 

Multi ItOUSe NV (AmstSEJ __ 

320 

+20 

_ 

— 123 

70 

39 

Record Holdings (SE) 

65 

_ 

OJ. 

— lil 

114 

89 

Record Hldgs. lOpcPf.(SE) 

114 



14J. 

iZA — 

91 

60 


60 

_ 


— Zb 

124 

42 


124sib 

_ 

55 

4.4 4.9 

224 

141 


m 


65 

3J UL2 

56 

32 

T re* lan Holdings .... 

56* 

_ 

(LB 

13 53 

131 

53 

Unllocfc Holdings (SE) 

55 

+1 

ZB 

53 103 

264 

115 

Walter Alexander (SE) 

165 


5.9 

3-6 12.2 

201 

190 

W. S. Yeates 

200 

_ 

174 

8.7 200 

175 

96 

West Yorks, lad. Hasp- (USM) 

335 

— 

5-5 

4JL 1A3 

Seenrltiej 

designated (SE) and (USM) are dealt 

In subject to the 

rules and. 

regulations of The Stock Exchange. Other securities listed Above are dealt la I 

| subject a the rums of FIMBka. 






Groni-fllc &.G>jn|wny Umiwd 
8 Lovs Lane, London KC3R EBP 
Telephone 01-621 1212 
Member of FIMBRA 


E 


Granville Davies Coleman Limited 
27 Lovat Lane, London EC3R8DT 
Telephone 01-621' 1ZI2 
Member of the Stock Exchange 



E3SHW*iF%» 




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40 


Financial Times Thursday November 12 1987 


Amwt Dofae Dries 
Optical 

Dedara- Lw Aconf 

fis "sst A 

Nw» Nor 19 Nor 28 Nor 36 

...Nw 23 Dec 3 Dec 4 Dec 14 

LONDON STOCK markets 
extended their recoveiy yester- 
day following President Reagan's 
attempts to calm the turmoil in 
the global financial markets. 
Share prices bounded ahead 
sharply,. as a number of City 
analysts suggested that the worst 
of the market slide may be over. 
Equities were helped by renewed 
profit-taking in Government 
bonds, with some major funds 
again switching out of fixed-in- 
terest issues ana back into blue 
chip shares. 

There were welcome signs of 

§ ood institutional demand for 
ie major stocks, many of which 
had fallen to significant support 
levels on Monday night 
Trading volume was moderate, 
however, with a total of 39,730 
bargains on the Seaq system 
compared with 50,000 plus dur- 
ing the market shakeout Busi- 
ness was mostly in the market's 
leading stocks, with many sec- 
ond-line issues still dormant. 

Marketmakers moved prices 
higher as soon as the equity mar- 
ket opened, sensing a continua- 
tion of the mood of optimism 
which sparked a strong rally 
during the previous session. 
Although the dollar had a slug- 
gish day, a reduction of upward 
pressure on the pound was 
favourable for the major export- 
ing issues. 

Glaxo, IC1 and Bats stood out 
strongly, and the bank stocks 
continued to forge ahead in a 
firm financials sector. The FT-SE 
100 Index, already 38 points up 
before 10.00am, ended the day at 
1639.3, a net gain of 65.8, and a 
restoration of £11.8bn in London 
equity values, according to 
Datastream. The closing level 
was virtually the day's best, with 
London encouraged by an early 
gain in a New York equity mar- 
ket curtailed by the US Holiday 
closure. 

Equities benefited both from 
institutional demand and from a 
reduced enthusiasm on the part 
of recent sellers. Analysts have 
warned that the share market 
would turn ahead strongly as 
soon as the mood changed. Yes- 
terday morning, Mr Ian Har- 
wood, of Warburg Securities, told 


LONDON STOCK EXCHANGE 

Substantial advance by blue chip equities while 


a sign of returning confidence in 
the marketplace. 

Government bonds opened 
lower on the bade of further sell- 
ing of UK bonds in the Japanese 
market overnight. Fax Eastern 
selling into the recent strength 
of Giles has been a cautioning 
factor this week. 

With the market also over- 
shadowed by the &400m tranches 
of existing stocks on offer at the 
bank of England, prices dipped 
by a 1% points. Prices dosed a 
touch off the bottom, helped by 
the futures market. 

Also lower were the Index- 
linked issues which have been 
rising sharply, partly in response 
to the Chancellor's latest infla- 
tion forecast, but also in order to 
keep yields in line with those on 
conventional bonds. IL stocks, 
also overborne by the new sup- 
ply from the Bank, crumbled by 
a full point. 

Life assurances made rapid 
progress with dealers citing a 
widespread stock shortage in the 
sector. Legal & General rose 22 
to 260p, and London & Man- 
chester 15 to 217p, the latter 
ahead of the proposed egm 
scheduled for December 2. Third 
quarter results from Commer- 
cial Union came out at SI 27.7m, 
compared with a comparable 
£72. 2m but did not match fore- 
casts which had ranged from 
around £130m to &148ro but the 
shares moved up 24 to 317p 
helped by the overall market 
trend. General Accident's pre- 
tax profits for the same period, 
£ 180.6m, were comfortably 
above estimates and the shares' 
raced up 55 to 808p. Eoyal, due 
- Shearson Leh- 


Government bonds give ground 


FINANCIAL TIMES STOCK INDICES 



N94 

Nor. 

Nor. 

Nor. 

Hoi. 

Ynr 

1987 

Since CangiiWIsu 


n 

10 

9 

6 

5 

Aw 

Mgh 

Low 

Wgh 

Lot 


90.99 

9232 

9234 

9132 

9L47 

8679 

9332 

(815) 

83.73 

awio) 


127.4 

mm 

4938 

0/1/75) 



95.44 

9647 

9442 

9447 

8045 

9922 

9023 


1044 

5053 






05W 

(2/1) 

(28/11/47) 

(3/1/75) 


12904 

1246.9 

1232-0 

12740 

3287.9 

U0S3 

19262 

12320 


19202 

464 








asm 

(9/11) 

06/7/87) 

(26/6/40) 


2684 

mt 

2774 

Mil A 

2765 

3364 

497 S 



7347 

4X5 








vm 

(Ml) 


05/2/83) 

(260073) 


478 

497 

600 

AM 

480 

437 



. 

T 

IVITY 

Earning YH. %tt«® 

1148 

1232 

1242 

1244 

13.93 

1009 

tofaes 

Noi30 

Nor.9 

P/E Ratio [nrt)(*> — ■ — . 

1030 

9.92 

944 

1036 

1025 

12.13 

Etaifty 

EqriQrVtoro* 

- 

1914 

2734 

27623 

.2009 

9».fl 

10640 

SEAQ Bargains (5ptn) 

39,730 

3MM 

1,36655 

30,734 

92446 

36258 

1375.80 

35353 

127032 

36691 

UB432 

- 




GSt Edged! 
EoritoBa^ 

L»pln< 


1744 

li&8 



7135 

4567 

6464 

6393 

4564 

rigs — — 


2763 

ms 



Bp 

- 

2,7162 

dJU 


Opening 


lOajn. 

1268.8 


12783 


llm 

1285.8 


Noon 


1 PJTL 


2 p.m. 


3 pun. 


4 pjn. 

1289.6 


1281.9 


12873 


1290.6 


1288.7 


Day's High 1296-2 Day's low 126&8 

Baris 200 Goat. Sacs 25/10%, Find I*. 1328, Oidhiii) 1/7/35, Grid Hina 12/9/55, S E Activity 1974, • HMJU5L 

LONDON REPORT AND LATEST SHARE INDEX: TEL 01-246 8026*" 


turned and rise 16 to 192p after 
preliminary figures showing 
pretax profits up 16 per cent at 
£65.7m - a shade above forecasts. 
Boots, due to announce interims 
on Wednesday - KJebiworts are 
going for £11 4m pre-tax - put on 
6 to 230p. BOC jumped 27 to 
333p in front of the ‘ 
urea expected today, the 
concensus is that a fourth quar- 
ter profit of around 1 £75xu will 
lift the full-year total to some 
&265m pre-tax. ' 

Other firm features yesterday 
Included internationals such as 
Beechnut, 24 higher at 430p, 
Fisons, 21 better at 252p, Glaxo 
% up at £10% and Wcueome 10 
to the good at 304p, the last- 
named in front oftoday's preUmi- 


fol- 


tax profits 


year. Other City analysts were 
also quick to switch to the bull 
tack. 

The market was also encour- 
. by the official clearance for 
e planned merger of British 
Airways and British Caledonian, 
which had been under a cloud. 
The revival of takeover activity, 
indicated also this week by the 
purchase of shares in Cadbury 
Schweppes by General Cinema 
of the US ana by Granada's bid 
for Electronic Rentals, is seen as 


to report today 
man are going for 
of £271m - put on 33 to 

Volume was slightly disap- 
pointing in the Breweiy sector 
and few stocks achieved rises of 
double-figure amounts. Turnover 
in AUled-Lyons totalled only 
2m shares but the price rose 12 
to 335p while Guinness, 10 up 
at 247p, unproved after advice 
from security house Wood Mack- 
enzie to switch from Whitbread; 
the latter's *A‘ stock edged for- 
ward 3 to 272p. A similar trading 
pattern emerged among Regional 
issues where J -A. De vanish 
recovered 10 to 233p. Fresh take- 
over enthusiasm lifted Gxeenall 
Whitley 8 further to 179p while 
merger candidates Matthew 
Brown, 620p, and Scottish & 
Newcastl e , 2. 

8 . 

Leading Building issues perked 
up as institutional buyers moved 
in amid thoughts that the sector 
was due for a considerable 
bounce from the recent 
depressed levels. Suggestions 
that a further cut in base rates 
has been postponed failed to 
deter buyers. Bine Circle rallied 
strongly to dose 21 higher at 
336p, while BPB Industries 
improved 32 to 273p. Steetley, a 
particularly dull, market of late. 


213p gained around 


picked up 14 at 251p L while Bed- 
land gained 13 at 373p. Among 
Construction issues, Cost&in 
rose 20 to 234p and Barratt 
Developments armed 8 to 150p. 

Id staged a useful rally along 
with other international issues 
and closed % point higher at 
£10%. Waxdle Storeys picked 
up 40 at 430p ahead of the immi- 
nent preliminary results. Coal- 
ite gained 31 to 305p on revived 
bid hopes and SntcUfTe 
man picked up 23 at 96p. 

GEC were again upset by the 
investigation into the Marconi 
subsidiary and talk of a profits 
downgrading by a leading UK 
securities house and lost 8 to 
172p after a turnover of 16m 
shares; Morgan Grenfell is fore- 
casting that GEC's pre-tax prof- 
its for the current year- due on 
December 1 - will snow a rise of 
around 15 per cent to £31 7m; 
Wood Mackenzie is going for 
£315m but has changed its 
stance on the shares f rom “buy" 
to "hold." 

Plessey edged up. 5 to 145p - 
Klefnwort Grieveson says the 
prospective yield of 6.5 per cent 
provides some support for the 
share price. Ferranti attracted 
widespread support, closing 6 up 
at 77p on a turnover of more 
than 6m shares. A County NatW- 
est buy recommendation helped 
Thom EMI rally 22 to 464p. 

The stores sector remained 
well at the forefront of the mar- 
ket upturn. Among the best per- 
formers were Next, up 20 to 
268p, Sears, 10 higher at 137p 
after Press inspired rumours of 
possible stake-building by Han- 


son Trust, and Coats Vfyella, 25 
better at 247p. Kataers jumped 
18 to 234p reflecting recent com- 
ment ana a brokers' buy recom- 
mendation. Barton Group 
edged up 8 to 228p ahead of next 
Thursday's interim results; 
County Nat West rate the shares 
a ‘buy”, citing the 17 per cent 
discount to the sector, and are 
forecasting pre-tax profits of 
£l8lxn against a comparable fig- 
ure of 51482m. Klefnwort Gn-- 
eveson go for 5180m pre-tax. 

Engineering stocks had their 
best session for some consider- 
able time. Leading and second- 
ary issues both showed sizeable 
gains although .interest was 
directed mainly towards first- 
line stocks. H rose 18 to 
and GKN 13 to 260p, wi 
Hawker Siddeley gained 16 to 
404p and Vickers 14 to 137p. 
County NatWest advice to switch 
from British Aerospace helped 
Rolls Royce advance 6 to 116p. 
Strong Improvements were regis- 
tered by Powerscreen Interna- 
tional, 28 up at 114p, and 
Hampson Industries, 15 dearer 
at 53p. Thomas Robinson 
jumped 22 to 323p and Smith- 
write 23 to 176p. News that 
three concerns, including the 
Kuwait Investment Office, had 
increased their stakes helped 
W.A.Tyzack rise 5 to 115p. 

Cadbury Schweppes* some 30 
points higher on Tuesday on 
news that General Cinema of the 
US had increased its stake in the 
to 182 per cent from 
i% per cent via a morn- 
ing "raid", closed a penny off at 
22lp as Cadbury made plain that 


the increased stake is entirely 
unwelcome and that it does not 
intend to accept any offer of 
involvement in management 
from General Cinema. Bowubee 
Mackintosh, another potential 
confectionery takeover candi- 
date, gained 21 to 416a while 
Banks Boris MeDongall put on 
21 to 285p an Goodman Fielder 
bid hopes. RHM's annual results 
are due on November 18. Public- 
ity given to a broker’s circular 
boosted Northern Foods IS to 
248p, while Urinate, in a mar- 
ket none-too-weU supplied with 
stock, rained 11 to 271p. Hsude- 
wood Foods finned 11 to 219p 
in reply to the more-than-dou- 
bled half-year profits and confi- 
dent statement. 

Ladbroke lead the revival in 
the Hotel sector, rising 19 to 
301p. 

Better-than-expected interim 
results from British Airways 
and a qualified green light from 
Trade and Industry Secre 
Lord Young for the pro 
acquisition of British Caled 
by British Airways boosted the 
latter's shares to 147p before 
profit-taking shaded the price to 
144p, a net gain of 19; pre-tax 
profits of 5232m, compared with 
most analysts* forecasts of 
around 5220m. 

Smiths Industries also fea- 


where, “buy" recommenda- 
tions from County NatWest lifted 
Cookson 38 to 446p and De la 
Roe 12 to 379p. Rood Interna- 
tional moved up 96 to 831p In 
the wake of a positive circular 
from securities house Citicorp 
Scrimgeour Vickers. . 

Reassuring advice from brok- 
ing houses gave fresh impetus to 
Jaguar and the price bounded 
24 to 308p amid a sharply 
increased trade of 5.3m shares. 
Wood Mackenzie suggests the 
group's exposure to theuS dollar 
has been misunderstood, “at cur- 
rent levels they offer both excep- 
tional value and a good defen- 
sive play should the market fall 
further*, says analyst Robert 
Mlller-Bakewell. Motor Compo- 
nents were also more cheerful 
and Lucas Industries bounced 
15 to 49Sp while Kwik-Fit ral- 
lied 14* to 152 *p. 

Advertising Agencies which 
were badly affected during the 
recent depression staged a tech- 
nical bounce. The movement 
was spearheaded by VPI, up 35 
at 173p partly In reflectio n of a 
recent seminar, and WFP, which 
rallied 33 to 33$). Saatcki A 
Saatehi returned to popularity 
and gained 19 to 347p while 
Lowe Howard-Spink r eco v ered 
20 to 240p_ 

Sentiment in the Prope r ties 
was given an additional boost by 
an excellent set of interim 
results from sector bellweather 
Land Securities. The latter’s 
shares rose 18 to 443p as the 
group revealed half-year profits 
some 5 3m above market esti- 
mates. MEPC rose 18 to 413p in 
sympathy. Great Portland * 
Estate* firmed 4 to 214p follow- 
ing interim profits at the top of 


market estimates, while near tre- 
bled half-year profits boosted 
9 to 118p. Phoenix 
Properties gained 7 to 
lowing good nine-month 
and a confident statement. 

• Fund management concerns 
welcomed more stable market 
conditions although buying 
Interest was described by traders 
as patchy. Mercury Asset 
pjplrwi up 15 at 270p and John- 
son Fry 25 to 135p. Elsewhere, 
British 4k Commonwealth 
recovered 25 to 300p and Singer 
Jc Friedlander, in which the 
former disclosed a stake of 8 per 
cent yesterday, improved 5 to 

^Phe ofl and gas sector got off 
to a shaky start but gradually 
picked up as the morning wore 
oil Crude oil prices failed to give 
much of a lead - Brent for 
December delivery hovered 
around Sl8 a barrel without 
showing any real confidenca But 
what really got the sector mov- 
ing in the early afternoon was a 
raid on Eateraise Oil shares 
by broker BZw on behalf of 
LASMO. BZW were bidding 230p 
a share for up to Il.7m Enter- 
prise shares - around 4 per cent 
of the latter. LASMO already own 
some 225 per cent of Enterprise, 
and were thought to have picked 
up only around 5m shares, or 2 
per cent, via yesterday's pur- 
chases - a topping- up exercise, 
x to LASMO. Ent 


iterprise 

shares closed 21 up at 230p on a 
turnover of 10m shares while 
LASMO settled 22 higher at 223p, - 
after 229p. BP old rose 4 to 251p 
and the new -held at 77p after a 
turnover of 34m; third quarter 

TRADING VOLUME 


figures from BP and Royal 
Dntch/Shell are scheduled for 
today. Ultriunaris third quarter 
figures were well received and 
the shares raced up 17 to 
167p.Elsewhere Trieentro! 
aped 8 to 88p and.Clyde 19 to 


rjly Peck established the 
major gain among Overseas 
Traders, closing 23 higher at 
238p. 'Following details of the 
agreed all-share merger, dealings 
were resumed in both McLeod 
Russel and Kennedy South*. 
The former ended higher at 397p 
and the latter settled at 158p, 

after 168p. 

The overall number of traded 
options yesterday was margin- 
ally higher at 27,369. Calls 
totalled 16.265 and puts 11,104. 
The FTSE contract attracted 
1,142 calls and 1.012 puts. Han- 
son Trust palls were in demand 
at 2^581; puts were just 296. GEC 
' stered 1,923 puts and 911 


Traditional Options 

• First dealings Pet 5 

• Last dealings Oct 16 

• Last declarations Jan 7 

• For Settlement Jan 18 

For rate indications see end of 
London Share Service 
Stocks to attract money for the 
c»n included Owners Abroad, 
Ossory EatatesJlOU Hldgs, 
TKM, Rover Group, Butte 
Mining, Rutland, Premier, 
Polly Peck, Black's Leisure, 
TSB, Eagle Trust, Hawtin, 
Northern Foods, GEC, Stalds, 
Campari, Aerospace Eng., 
Cluff Oil, Siebe, Glentree, 
Dares Estates, London XT, 
New. Eng. Prop** Greenwich 
Res.,BnIa, Dewey Warren. A 
doable option in Butte Mining 
was recorded, but no put 
options. 

IN MAJOR STOCKS - 


The foaming is based on trading nriume for Alpha securities dealt through (he SEAQ 
system yes te rday until S pm. 


Stock 

ASDA4IF1 

2£S3 Tsar 

BAA. 


Stock 

EdgH* China Civs. 
EocepfteOa 


NEW HIGHS AND LOWS FOR 1987 


ALS (IS) INSURANCE (S) LBStlHB Ilf 
MOTORS (1) NEWSPAPERS fl) PAPERS (2) 

FHO r mr t n textiles a trusts fit) 

OftS (9) PLAN TATW*tS (2) WHS* (O) 


moHSfi). 
INDUSTRIALS (TlflnadnK AptauNund. 

NEW LOWS (148). 

AMERICANS (30) CANADIANS (9) BANKS 



(Mel 


Votam 
000’s 
753 
10 000 
2^00 
536 


Slock 


PtMMT — • 
PnrirntUI. 


1.200 Grand Mat __ 

l3oo SUSA 

1,701 GoanSMlLE. 



Rank Org. 

fiMC 

RUM 

880 RkUU&CoL. 

,3®0 Rwtttnd 

500 ReedtaCL 

235 Reuter* 

709 RTZ. 


000’s 

SSL 

263 

5<7 

440 

j™ 


RoK-Rojis. 


1.0CS 

336 

3^500 

2.100 

1.300 

1,400 

397 


Ml Ba* talW. 

s.iMdx a SjotehiTZ 

Ssosbay — : 

Scott & Newcastle _ 
Saw — 


1.100 

609 

2.000 

E3S 

4,100 


I Trait* 

Smith A Nn*ew _ 

Stndwd Chart. 

Stordmise — 

SunAiOaoce: 

TAN 

TSB. 


UOO Maxwod Cooaah . 

UOO Moat Bn 

313 hUdawl Bank 

STS HalWflft Bm0i„ 

15 . Men 

1.950 ! Norfhera Food*. 

TO 


3.900 Tarmac . 

1,100 T«l 

1,400 

U00 Trafalgar Huh — 

2,500 TTwat Fort*. 

3.000 URnnsr 

1^00 UsOerer 

254 IMteri Bteulu 

231 Wvllcota* 

960 WUUMIdA 

4.900 


1.700 

3.700 
7.100 

422 

130 

4.1D0 

1,650 


(S) BREWERS (1) BUaOSWS ( 1 ) OB 
CALS fT) STORES (7) ELECTRICALS 09 


PIBdagtMBm. 

RISES AND FALLS YESTERDAY 


uoo 

1.400 

2,000 

^300 

698 

l.«X) 

V200 


FT-ACTUAR1ES INDICES 


these Infices are ihe joint compilation of fte Financial Times, 
the Inshtote of Actuaries and the FacuRy t& Adnaries 


EQUITY GROUPS 
& SUB-SECTIONS 

Figaros to parentheses show number of 
stocks per section 


59 


CAPITAL COOtlS (Z13). 

Building Materials (30). 

Contracting, Construction (33) . 

Electricals (14) 

Electronics (33) 


Mechanical Engineering (60)_ 

Metals and Metal Forming CD- 
Moron (14) 


Other Industrial Materials (22). 

CONSUMER GROUP (183) 

Brewers and Distillers (71 ). — .., 

Food Manufacturing (23) 

Food Retailing 07). 


Health and Household Products (10). 

Leisure (30) 


Packaging & Paper 06). 


Publishing & Printing (15) . 

Stores (35) 

Textiles (16) 


OTHER CROUPS (87). 

Agenda (17) 

Chemicals (21) — 


Conglomerates (13). 

Shipping and Transport (11). 

Telephone Networks (2) 

Miscellaneous (23). 


INDUSTRIAL CROUP (483). 


Wednesday November II 1987 


ladto 

No. 

Day's 

Change 

EsL 

Ermine 

YWd% 

(Max) 

Gran 

Dir. 

YMd% 

(ActU 

(27%) 

EsL 

P/E 

Ratio 

(Net) 

uriaf. 
19W 
to Ue 

Index 

No. 

iKfeX 

Nol 

Index 

No. 

index 

No, 


+42 

1099 

4.40 

1644 

1930 


62648 

64725 


1 2k 

+63 

1087 

431 

1647 

2291 


82561 

84733 

t?TTl 

117677 

+53 


430 

1236 

3612 

111539 

114536 

1162.80 

117365 

170549 

+2J6 

1062 

531 

1229 

6276 

166676 

166265 

172631 

177160 

143459 

+02 

U.42 

332 

1648 

35.99 

143209 

144631 

148735 

149522 

31344 

+5.7 

1683 

533 

1063 

1628 

29626 

30649 

31461 

3*1-77 

365.97 

+4A 

1076 

431 

1632 

1655 

35032 

34864 

36624 

34433 

23639 

+5.4 


4.90 

9.02 

731 

22435 

ZMjn 



111149 

+3.7 

937 

446 

1269 

3736 

105671 

1*54.99 

111054 

122409 

96050 

+43 

070 

3M 

1438 

2628 

91088 

919.77 

94837 

94963 

89949 

+04 

1135 

432 

1632 

1733 

87041 

87737 

NT7*7j 

970.02 

76250 

+44 

932 

439 

6X29 

1738 

TiSM 

72665 

74092 

73463 


+4.7 

7.70 

338 

17.29 

4031 

184 05 

FTTTT] 

191693 

190692 

I/' 1 

+4.9 

073 

2.66 

1738 

27.95 

159082 

159693 

166730 

151425 

99149 

+53 

005 

436 

1531 

2830 

94066 

94337 

973J0 

97260 

43934 

+2.7 

9^49 

431 

1338 

1622 

42736 

44672 

45569 

47139 

2992.42 

+54 

738 

437 

1736 

9535 

FTiTT] 

2*9613 

2999.06 

264430 

84622 

+44 

069 

332 

1531 

1097 

80735 

79620 

81240 

87695 

5585S 

+7A 

1627 

433 

1026 

1535 

519.92 

528.94 

559.91 

54960 

795.95 

+4.9 

1092 

4.45 

1640 

2038 

75938 

71220 

78622 

79934 

94131 

+73 

634 

231 


16.91 

87639 

89535 

935.90 

03 

97642 

+63 

1009 

4.71 

1212 

. 3338 

92061 

94333 

97674 

98735 

103636 

+63 

9.92 

431 

1653 

2233 

97519 

99037 

103666 

MflTfl 

161844 

+4.9 

1051 

5.09 

1247 

5644 

154555 

153532 

159625 

158539 

S57J4 

+13 

11-82 

4.71 

1629 

18.98 

84713 

12600 

83682 

78931 

111344 

+73 

1348 

433 

835 


1039.40 


l'. , l 

313334 



EH 



ww i 

R 'T-i 


dHJ 

85065 


The 

No* 

10 


Ftf 

No* 

6 


Year 

ago 

Gw®) 


Oil & Gas (17). 


i L : 1 ''l b! L Iff j ■ Y . lFT-*i l>L-:t_7| | 


500 SHARE INDEX (500) . 


FINANCIAL CROUP (120). 

Banks (B)— — — 


Insurance (Life) <8>. 


Insurance (Composite) (7). 

(Broken) (8) — 


Merchant Banks (11).. 

Property (49) - 

Other Financial (29).. 


Investment Trusts (88) — 

Mining Finance (2)—..—. 

Overseas Traders (10) — 


ALL-SHARE INDEX (720). 


FT-SE 100 SHARE INDEX « . 


90355 


59180 

Kl*9i 

867.63 

483.961 

772j64 

BMW 

85816 

35735 


75320 

35264 

83534 


U7A3 


Isdo 

No. 


16393 


+43. 


+4.7 

+43 

+43 

+63 

+73 

+26 

+3.9 

♦4.7 


+3.7 

+43 

+3.6 


+43 


OVl 

Oe» 


+654 


9.96 


2U8 


1437 


545 

1031 


1249 

10.94 




16883 


439 


536 

633 

530 

549 

7.41 

440 

3-45 

4J51 


330 

4.84 

534 


430 


OMfi 

Low 


15973 


1240 


630 


8.90 


»m 

1251 


8.74 

1031 


Nor 

10 


1573LS 


24.93 


2842 

25.98 

3236 

1849 

3839 

849 

16.77 

1137 


15.94 

1277 

36.40 


Nn 

9 


15653: 


86745 


56533 

588.95 
83034 
45426 

720.95 
31209 
82607 
34L44 


72615 

33691 


78481 


No* 

6 


16268 


86693 


567JH 


82135 

45331 

709.92 
33139 
82944 

349.93 


Bill 

34415 

13434 


78744 


Nor 

5 


16368 


89734 


593J3 

605J2 

86838 

48330 

74484 

34706 

865.74 

36933 


78932 

36433 

87626 


81548 


Nor 

4 


143531 

89936 


60735 

66298 

85337 

452.96 

1273.91 

34685 

79611 

35544 


83446 

34431 

77221 


Yev 


16545 


FIXED INTEREST 


PRICE 

INDICES 

HI 

Day's 

change 

96 

Toe 

Nnv 

10 

xd ad}. 

today 

xdadL 
1987 
to (Me 


BrttdGmmant 




m 

PPj 

2 

5-15 years—..— 

14338 

-643 

14536 

g 


3 

Over 15 years — 

15160 

-644 

15362 


1241 

4 

Irredeemables 

16835 

-247 

17332 


1335 

5 

All stocks ... 

13932 

-134 

140.97 




Uex-LMad 




m 




124.93 



mm 


7 



-093 

nun 



8 

pBSm 

115.96 

-038 

11698 


282 

9 


ESSES 

EE1 


_ 

9.94 

10 


84.73 

+606 


m 

5.74 


AVERAGE CROSS 
REDEMPTION YIELDS 

Wed 

Nov 

11 

Tne 

NOV 

10 

Year 

ago 

(approx.) 


lifflihCwtiimiri 




i 

Ln 

(wk 

•39 

838 

934 

? 

Cqupofu 

IS yean...— - 

8.99 

832 

1256 



2> years. 

&96 

832 

1037 


Hedum 

5yeaK_™_ 

696 

862 

1134 


Cmpens 

15 yean.-..,. 

932 

932 

10.90 



ywto4 _ 

937 

931 

1032 

7 

m 

Imm 

932 

868 

3138 

8 


15 yean....,^... 

933 

932 

1138 

9 



937 

297 

1039 

EE 


■MRMrerer 

677 

839 

1032 


ivjrUI 





n 


5yrs_ 

243 

231 

427 

12 


OwSns- 

3.94 

337 

335 

13 


264 

251 

292 

14 


298 

3.92 

330 

15 

Dehft 

5 years — 

10.75 

1064 

1138 

16 

Lew 

15 years— 

1067 

1031 

1138 

17 


25 years 

1867 

3031 

1138 

m 



19.71 

1032 

1131 


♦Opening bides 15975; 10 am 1UL7; U am 1622.9; Noon 162B2; 1 pm 16223; 2 pm 16283; 3 pm 1634.9; 330 pm 1635B; 4 pm 16353 


f Flat yield. Hk 

available I 


hhedla 


Issues. A new tbt of constituents is 
4BY, price 15ft hr post 32p- 


LONDON TRADED OPTIONS 


Option 

— 


~ 


PUTS 

-- • 


a 

o 


o 

a 

UR 

Allied Lawn 

.300 

48 

60 

70 

Efl 

23 


raw 

330 

30 

42 

55 

Efl 

37 



360 

17 

28 

40 

Efl 

52 

Em 

Brh. AinHQS 

130 

28 

35 

38 

12 

17 

22 

1*144) 

140 

22 

28 

33 

17 

22 

28 


160 

13 

20 

23 

28 

32 

97 



CM 

l| 

70 

30 

45 

55 

1*290) 


rl 


55 

40 

60 

65 



Efl 

Efl 

30 

65 

70 

75 

BP. 


11 

30 

47 

15 

23 

30 

(•251) 


Ffl 

28 

37 

25 

33 

40 


m '. [•M 

cal 

22 

30 

— 

45 

52 

Bats 

730 

60 

90 

105 

40 

Efl 

65 

(*771) 

BOO 

40 

65 

02 

65 

ffl 

95 


850 

20 

45 

62 

105 

Efl 

128 

Cons. Gold 

750 

95 

120 

150 

70 

uo 

150 

1*755) 

800 

65 

100 

130 

100 

150 

190 


B50 

45 

SO 

no 

140 

200 

235 

Coortwkb 

300 

Cl 

78 

05 

20 

30 

42 • 

€-3291 

330 

1-1 

60 

TO 

35 

47 

57 


360 

U 

45 

S3 

57 

65 

78 

Com. IMon 

280 

55 

65 

00 

20 

30 

45 

(•307) 

300 

35 

50 

65 

30 

45 

55 


330 

25 

35 

45 

45 

65 

70 


360 

10 

25 

35 

70 

00 

05 

Crife&Wke 

280 

40 

57 

70 

30 

40 

45 

(*288) 

300 

30 

52 

60 

42 

55 

70 


330 

22 

40 

30 

62 

73 

B0 


360 

13 

32 

42 

83 

95 

105 

Brittah Gas 

130 

17 

21 


ffl 

EON 

22 

(•132) 

135 

14 

— 

til 



— 


140 


15 

Efl 


29 

29 


145 

H3 

— 

Efl 

XM 

— 

— 

SAC. 

160 

27 

35 

4? 

15 

20 

25 

(-172) 

180 

15 

23 

33 

25 

30 

37 


200 

S 

15 

22 

35 

42 

90 

G_K.lt 

240 

43 

55 

Ffl 

Efl 

33 

40 

(*2HJ) 

260 

32 

45 

Efl 

ffl 

43 

50 


200 

23 

37 

Efl 

Lfl 

55 

63 

Grand IM. 

360 


I| 

o 

20 

LI 

30 

(•374) 

390 


Efl 

Ffl 

35 

Efl 

55 


420 

ftji 

EH 

U 

60 

ffl 

73 

IXJ. 

950 

150 

165 

200 

40 

70 

85 

(•1044) 

1000 

120 

135 

175 

60 

90 

105 


1050 

95 

us 

ISO 

» 

115 

130 


280 

50 

67 

80 

20 

.35 

40 

1*309) 

300 

40 

55 

72 

32 

45 

65 


330 

26 

43 

60 

45 

60 

BS 

Lari Seantttes 

El 

i;i 

fl 


rfl 

Efl 

35 

(•440) 

r| 

1.1 


Efl 


Efl 

SO 



fa 


EM 

i m 

ffl 

60 

Maria & Span. 

■ 1 

r| 

38 

44 

12 

16 

20 

(*186) 

fl 

BT^l 

26 

32 

22 

■ 2b 

32 



u 

14 

26 

34 

40 

46 

Britofl 

200 

35 

45 

55 

18 

27 

35 

(■214) 

220 

22 

32 

42 

20 

37 

45 


240 

15 

23 

30 

40 

50 

58 

Rotis-Roice 

110 

20 

27 

|| 

12 

15 

20 

(*117) 

120 

15 

22 

ffl 

17 

20 

27 


130 

a 

15 

EjI 

22 

27 

33 

Skdl Trans. 

950 

93 

120 

145 

65 

100 

115 

(*965) 

1000 

75 

95 

125 

905 

127 

150 


1050 

SO 

7b 

105 

120 

155 

178 

Surtboue 

El 

40 

40 

57 

15 

III 

23 

(*242) 

El 

30 

37 

45 

22 

lfl 

32 



IS 

30 

37 

35 

Efl 

42 

Trafalgar Hoorn 

260 

47 • 

60 

67 

15 

23 

28 

(*294) 

280 

33 

45 

52 

28 

35 

42 


300 

20 

33 

40 

43 

50 

57 

TSB 

100 

14 

(I 

Efl 

11 

17 

17 

(*102) 

uo 

10 

ffl 

ffl 

18 

22 

23 


120 

7 

Enfl 

Efl 

25 

28 

28 

Wotiwrth 



65 

65 

17 

Efl 

27 

(-291) 


Efl 

50 

so 

30 

Efl 

40 


tJ 


35 

35 

45 

Efl 

60 


Opda 

ISM 

lfl 

Ifl 

Efl 

Ifl 

■ ■ 


ffl 



ffl 



25 

37 


Efl 

13 

FT^fl 

Efl 

is 

35 

50 

9feM 

o 

4 

EH 

Efl 

37 

52 

67 

BAA 

90 

13 

24 

a 

« 

15 

28 

(•97) 

Hit 

6 

17 

Ifl 

10 

20 

23 


UO 

2 

U 

Efl 

15 

25 

30 

BAT MM 

ifl 

62 

nu 

as 

II 

15 

27 

(*445) 

lfl 

35 

Ifl 

ur 

ifl 

30 

40 


Efl 

8 

efl 

50 

Efl 

45 

(0 

Brit Teltan 


F9 

25 

Ffl 

ifl 

21 

32 

(*223) 


lfl 

16 

Ifl 

Ifl 

33 

67 



Cl 

10 

Ifl 

Ifl 

48 

62 

CoAary SdnMfus 

ifl 

Efl 


Efl 

ifl 

Ifl 

25 

mam 

ifl 

Efl 

Lfl 

Efl 


Efl 

38 



pi 

LOT 

Efl 


El 

30 

(*247) 


kfl 

22 

Efl 



40 


W'M 

Kl 

14 

Efl 

tjB 

Efl 

55 

LaAroit* 


28 

43 

53 

6 

15 

25 

MOO) 

300 

8 

30 

40 

12 

25 

35 . 


330 

1>2 

16 

27 

35 

45 

53 




-• 

ii ' • i. - 


■ -#i ■ 


■ - i 



- 

CALLS 

" 

t •' ' PUTS . ] 

Option 


‘trrm 

o 

IO 

up?! 

o 

E3| 

LASMO 

zoo- 

zt 

42 

Efl 

■ ■ 

IS 

EtiH 

1*225) 

220 

12 

30 

ifl 

17 

2U 



240 

5 

23 

ifl 

Lfl 

42 

LB 

PUMiMon 

(*1«) 


20 

40 

Efl 

20 . 

IS 

25 

til 

U 

33 

ifl 

25 ■ 

32 


mum 

■ ■ 

22 

Efl 

» 

37 

42 

Fiona* 

(•145) 

140 

12 

Kfl 

33 

■ fl 

16 

ffl 

160 

3 

'Efl 

23 

lfl 

Z7 

ffl 


UO 

2 

ikfl 

14 

Efl 

■lfl 

■ifl 

PiedotfU 

». ■ 

50 

100 

120 

ffl 

Ei| 

» 

(•780) 

|. • | 

25 

75 

90 

1 | 


100 


N -M 

■Sot 

46 

75 

Lfl 

Efl 

IX 

P.A 0. 

Kfl 

Ifl 

75 

SO 

5 

Ifl 

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(*465) 

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Efl 

50 

65 

20 

ffl 

45 



kfl 

30 

45 

45 

Efl 

70 

Ratal 

200 

10 

Ffl 

Ffl 

n 

17 

23 

(•207) 

220 

4 

Ifl 

Ifl 

20 

X 

35 


240 

2 

Ifl 

Ifl 


45 

X 

RXZ. 

Ifl 

ifl 

Ifl 


ffl 

ffl 

Ffll 

(*2731 

1-1 


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lfl 


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kfl 

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(Hi 

efl 

Ifl 

Lfl 

total Reefs 

80 

Efl 




4 




1*586) 

90 

kfl 

12 

15 

8 

15 

23 


100 

Kfl 

9 

13 

15 

23 

X 

Tr. U*% 1991 

104 

3S| 

IS 


Q> 


_ 

(•106) 

10b 

Ul 



08 

— 


108 

oft 

oil 


og 

1ft 

— 


uo 

0*g 

Efl 

2A 

5ft 

— 

Tr. 12% 1995 

W:’,E 



El 

m 



a 

CHS) 

lfl 

— 

— 

Efl 

— 

Tr. UV% 03/07 

EES 

-3t* 

4ft 

5H 

0ft 

* 3z 


(*123) 

120 

2 

30 

3 

1A 

% 


122 

124 

14 

i! 

ik- 


5ft 

Option 

o 

O 

J mm 

Dee 

E23 

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Amorad 

110 

15 

z 

32 

15 

22 

27 

(108) 

120 

12 

22 

23 

S 

27 

32 


130 

7 

15 

20 

X 

32 

37 

Barclays 

(•453) 

420 

65 

75 

85 

2S 

35 

45 

460 

40 

50 

65 

40 

» 

60 


500 

17 

35 

45 

60 

70 

05 

BMdoni 

390 

55 

77 

Ffl 

15 

Efl 

30 

(*430) 

420 

37 

60 

Lfl 

X 

ffl 

53 


460 

20 

43 

Lfl 

52 

Ifl 

75 

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220 

28 

37 

42 

15 

20 

25 

(*230) 

240 

12 

Z 

32 

X 

33 

30 


260 

0 

17 

S 

43 

45 

50 

BTR 

■ 1 

37 

‘47 

» 

14 

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25 

(*245) 

M i 

25 

35 

40 

20 

Ifl 

32 


E3 

13 

3S 

X 

35 

Lfl 

45 

matCMrn 

300 

50 

67 

75 

15 

27 

33 

(*336) 

330 

30 

50 

58 

23 

35 

X 


350 

20 



32 



Do Boon 

1050 

100 


_ 

60 



(1850) 

UOO 

70 


— 

UO 


_ 


1200 

50 

Efl 

— 

190 

Cl 

— ■ 

Dhons 


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Ffl 

ffl 

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Ifl 

ffl 

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55 

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165 

200 

X 

X 

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(*1053) 

1050 

85 

140 

135 

70 

105 

125 


UOO 

55 

120 

155 

95 

DO 

IX 


1150 

40 

100 

135 

IX 

160 

175 

Hanoi 

UO 

ffl 

26 

29 


8 

12 

(1Z7) 

120 

Efl 

20 

24 


12 

16 


130 

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14 

19 


17 

22 


140 

MM 

' 9 

14 


27 

X 

Larin 

200 

n 

ft 

40 

14 

n 

27 

(*225) 

220 

13 

23 

X 

27 

33 

40 





— 


— 


M kOnri Bk 


50 

65 

75 

X 

40 

30 

(*350) 


75 

45 

55 

40 

5ft 

65 



12 

X 

40 

55 

X 

85. 

Sears 

■51 

27. 

77 

ffl 

9 

4 

14 

(136) 

■Fl 

15 

n 

Ifl 

U 

14 

17 


K3 

20 

16 

Kfl 

17 

20 

23 

Tama 

140 

24 

X 

Efl 

7. 



MSB 

153 

14 


ifl 

15 





— 

Lfl 

Ell 


24 

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Trwtkoese Ferto 

l'_l 

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Ffl 

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75 

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Efl 

42 

45 

40 - 

Thom EHI 

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(■464) 

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65 

Cfl 

ifl 

X 

Untiwer 

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Ifl 

Kfl 

73 


■A 

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(*440) 

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ifl 

75 


EJ 

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ifl 

43 

Efl 

Kfl 

100 

Wriksn* 

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lfl 

Efl 

Efl 

Efl 

Efl 

45 

(*305) 

Kfl 

Ifl 

Ifl 

Efl 

ifl 

Efl 

69 


Efl 

Efl. 

Efl 

lfl 

Ifl 

Efl 

80 


IMKIIflB 

L-J 


E3 

L3 

r??i 

□ 

□ 


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(•1635) 

1550 

UOO 

1650 

UOO 

1750 

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IX 

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70 

50 

SB 

20 

in 

135 

120 

100 

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50 

230 

in 

us 

130 

no 

9B 


1 



1 


. us 273» CABS 16266 I 
FT-SE faatac Crib 1342 Puts 1412 
4 Uaier4iieg Hcarhy prise. 


British Funds 

Corporation, Domliilou and Foreign Bonds . 

Industrials 

Ruriidal and Properties 

OUs. 


Plantations. 
Mines — - 
Others ...... ,.i 


Rises 

Falb 

Same 

0 

111 

3 

•5 

21 

28 

• Jt -835 • 

. 196" 

- - SSL 

345 

73- 

209 

• 63 

14 

34 

4 

4 

6 

47 

75 

75 

80 

107 

74 


Totals. 


1,379 


601 


960 


LONDON RECENT ISSUES 


EQUITIES 


£ 


FJ> 

FJF. 

F.P. 
F3. 
180 
FA 
FJ 
FJP 
FP. 
F JP. 

rr. 

FJ* 

FA 

FJ. 

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F3 

FA 

F3 

F.P 

FJ 

FA 

FA 

FA 

FJ» 

FA 

FA 

FA 

FJ 

FJ 

FJ. 

FJ 

FA 

FJ. 


601 


2300 

601 


2601 

no2 


3000 

902 


2300 


2001 


2001 

2001 

1202 

2102 

901 

25fli 


M7 


,U« 


96 

aw 

27 

- s 

la 

so 
81 
67 
im 
135 
125 
• 23 
148 
82 
191 
128 
98 
UB 
S2U. 

253 

180 

317 

26 

98 

93 

30 


61 

160 


i+AorJnad.kic. SO01 _. 

Anglo Leasing top — 


16 Ibiardc Assets WmUs._J 
73 HawerHonmlOp. 

75 IHti* Mivttam 

64 BFCTruttlDp 

18 KtartsaHtolp 

llB KkhHUphSi 

5 EFM Dream Tmtsp — J 
238 EnaBdi 6 Criedpriai ImI 


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115 

13 

83 

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60 

101 

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155 

103 

130 

a 

68 

73 

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+3 


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Mr. 




RQ25c 

U25 


R2A 

mz5 


8644 

R3.0 


H25 

L9 

LL53 

1153 

RU7 

IA3 

123 


036.9 

R2LD 

840 


R4J75 

RL5 


FIXED INTEREST STOCKS 


61 

123 


,94 

041 




143 


215 

L94 

174 

_61 


93 

ho.4 

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EtS 



CLASSURED ADVERTISEMENT RATES 




Stogto 

Par #ie 

cobmn on 

route. J flood 

(mis. Jobs) 

- :i . '.. • 

:■ I •• 

17-90 

4300 

1200 

4100 

9 JO 

3200 

1300 

' 4400 

l>m 

4100 

950 

3200 

950 

3200 

1200 

4100 

— 

2200 

• — 

. 3000 


£• per Sfegh eriw rot nba (Mbi M ch) 
AN infeci xnfedx VAT 

For fmtimr dbcrifr wn He to: 

Cfew i iru Adrertbanart M 


HNAIICIAL HUES, U CANNON STREET, LONDON EC4P 4BY 


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76838) 777 JB 1 7ML20 


iflVIll 


U5L0I 12HJO 12524 1ZJ7J 

UU M2 2 M7JI lttuavio) 


17241 1AA 19UM IB4.nl 23219(22 191 


IMT M* 1 t» 


257ii | m.n 

pn* | (B/Q 
2MJN I XML77 

tun* 



5794 

5872 

U) 

W.7 

2923 

TAb 

40013 

12209 

43037 

13172 

200-24 

213167 

<7627 

47667 


m.y.&e. all coanra 


OVER-THE-COUNTER Naatdaq national market, closing price * 


13*!+ % 

37 + % 
1314 

5% 

*%~ h 

58% + % 
11 % - % 

21% -i% 
12 + 1 * 
7. - % 
20% + *a 
Wi- H 
24+1. 
» + % 
141. -1 
6*1* -IV 
«% + 1* 
177*+ % 
81*- % 

*=i 

+ i. 
+ % 


mm 


211. 223* 

n. «% 

n» -t% 

41. «l 

3% £*. 

«lj B3* 

•«* 5 s * 

21-16 2% 

P s 

2D% 21 

«% fS* 

^ ?' 

>* ? 

; a % 

18*4 16*. 

. IS 15 

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( •% .O’* 

, 10*, 111. 

i w% as% 

; i k 'a 

I W% «% 


Btetfc 

Ub 

HU Lw VW Hmr 

uaum 28 

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K 394 

14% 

13% 

13% 

UnTstev 

82 23 

21 

«% 

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Unvft*93a 

ID 346 

tas* 

12% 

121.- % 

UoMIJM 

343386 

35, 

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UmUadJO 

81935 

4 *7-16 

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V8*ad 

15 218 

/ V 
«% 

«% 

18 +1 

vu 

3474SV1B 

V| 

6 

VLSI 

SB 8S8 

8% 

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VM Sis 

.« 147 

*0 

0% 

10 + % 

VWR JO 

7 2B 

1«*4 

«% 

w%+ % 

VaUdLg 

181 <19 

3% 

8% 

% 

VWNH 1M 

54 178 

38% 

30% 

30% — % 

VasiSM 

388 

+7 

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*% _ % 

V«n* 

aaa 

5% 

2»" S 

Vlcocp 

485 

6% 

6% 

8%- % 

VkwNte 

14 47 

5% 

4% 

8%+ % 

Vlldna 

» 38 

12% 

12% 

121, 


71 611 

18% 

w% 

18% +1% 
14%+ % 

Vtatek . 

388 

IS 

14% 

Volvo 12*0 

401 

38% <08% 

88% - % 

w w 

WO 40122* 17 57 25% 24% 

B4%- % 

WTO 

M .18 

12% 

121* 

12%+ % 

Wdbro +0 

D 78 

20% 

19% 

20 + % 

W*shE*128 

19 70 

iSt, 

15% 

15% — % 

WPSU 60 

6 H50 

341. 

23% 

23% 

WM88* j40 

51740 

W, 

14% 

15%+ % 

W»UfQ1.4«« 

8 303 

10% 

10% 

10 %+ % 

WambxLOB 

IS 13 

16% 

15% 

«%+ % 

’HttmP .4B 

• 

23% 

22% 

22% 

WtoJfit/05* 

40 

81* d 7% 

7V“ % 

Waibta 

a 48 

13% 

13 

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Wnttmn 

18 178 

18% 

17% 

17% - % 

Wamar j04« 

15 T 

14 

14 

14 - % 

Wa-Aul 

» 383 

8% 

7% 

8 

WstCm 

1337 

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11% 

117*+ % 

WHF3L.10* 

3 

35% 

35% — % 

WnWat* 

IS 1 

14 

IS 

13 

WunPb . . 

IS 174 

9% 

9% 

9%+ % 

wrru 

n mo 

11% 

11% 

11% + % 
15% - % 

munwn 

4482 

15% 

16 , 

WmortJ GO 

11 14 

16 % 

18 

18% + % 

WMwOl 

21 23 

18% 

18% 

15% - % 

WMtFM 

13 187 

19% 

IB 

19 

OTialTcll 

80S 

3 

18% 

17%- % 

WtitmilUB 

8 603 

33 

33 + % 

WIUAL 

18 322 

15% 

15. 

15%+ % 

WIBFB JXm 

- 10 

10% 

23 

W%- % 

vwimT* m 

9 7104 


21 

WltanF 

llrtnlfcur 

fniw“ 

W 369 
10 118 

3 

r* 

WtesrO .40 

» 123 

IS. 

M% 

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Wototm 24 

8 68 

10% 

10% 

10%. 

were 20 a 

630 

11% 

11 

11% 

WOW- - 

_®380 

2% 

1% 

17*- % 

Wortttfl j4D 

IS- 838 

16% 

W 

M%+ % 

Wynwn -BO 

112 

«% 

13 % 

«%- % 

wys« 

133995 ..30% 

30 

20% - % 

XOUA 

X 

833 

Y 

11% 

z 

* 

11%+ % 

XlCOT 

981479 

7% 

W* + % 

Xkte 

4344 

7 

8% 

B%+ % 

Xyinok! 

10 92 

91. 


B + % 


33 238 0 

IB BOO 28% 

*%+ % 
26%+ % 

ZbmUt 1 j44 

VI 

*% 

26% 

2B%+ % 

Zondvn - 

387 

0 

8% 

8%+ % 

2»CBd 

212 

B% 

3% 

3%+ % 



I ». i MIT; V lll-Hlll ir>il 


2L224.77 (12/12J |1.«5JH2BrtO» 



HMH 

Q*>SE(«140) 


zjm 

187 1 SWITZERLAND 

ShM BMk M (SUZZSn 


NEW YORK* ACTIVE STOCKS 


GmtnlEfeaSc. 

•TIT 

OH 


State Oasteg Ctaje 
0*4(4 pna on i to* 
2«Rjno 43% - % 


*anEx?n-a_ VMUBO 22% - 1% UMyiC+y. 
lHW4«9J M*,400 IB1* +■ ? Dtal 


s»52»„« 39% - i, Wmrntm 

igS8 § : i 
»S:2 5 



t Chief price changes 

| A J iN LM JIN (in pence unless otheiwlsa IncBcaled) 


RISES: Blue Circle bids. 338 +21 

BATInds 445 +38 British Airways . 144 +19 

BOC Group . 333 +27 CommUnion — 317 +24 

BPSInds 273 +32 Cookson Group. 446 +38 


Enterprise Oil _ 
Gen Accident — 

Jaguar 

Johnson Fry — 
Legal & General 

LASMO 

Polly Peck Inti _ 

RHM 

Ratners Group _ 
Rowntree — ..... 


230 +21 
808 + 55 
308 +24 
135 +25 
260 +22 
223 +22 
238 +28 
285 +21 
234 +18 
416 +21 


Sears 

TI Group — 
Tricentrol — 

VPI 

Vickers 

WPP Group. 


137 +10 
233 +18 
88+8 
173 +35 
137 +14 
338 + 33 


FALLS: 

Exch 15% 1997 _E135ft -2ft* 
Tr2KftIL2flll_£103fl* -1ft 


Have vour F.T. 
hand delivered in Norwav 



Have vour F.l. hand delivered . . . 


. . . at no extra charge, ff you work m the business centre of 

ATHENS 

0 Athens (01) 7237167 .‘ ' And askTSjDTVogiams for details, or caH 

HeDcnwDiSlriHutioa'Agency 0 (W) 9919328 

FINANOALHMES 


Europe's Business Newspaper 



If you work in the business centres of BERGEN, 
OSLO or STAVANGER — gain the edge over your 
competitors. 

Have your Financial Tunes personally delivered to 
your office at no extracharge and you will be fully briefed 
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we'll send you 12 issues free. Then see for yourself why 
lly delivered to William Ungeheuer, Time magazine's senior financial 
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i or affect your coverage of international finance." 

gjk 0 Oslo (02) 684020 

gipSJl®'* And ask Heidi Aastoip at Narvesen AS for details. 

FINANCIAL TIMES 

Europe's Business Newspaper 

Ir"' — » — — 1 ; — 
























































































































































































42 


NEW YORK STOCK EXCHANGE COMPOSITE CLOSING PRICES 


12 Mc«| 
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»% W* 
32% 17% 
27 10% 

2P* 84 
ft 84 

«% a% 

274 247, 
12% 64 

88 154 

164 9 

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194 

3S 144 

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114 4% 
204 154 
214 17 
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984 48 

si ^ 

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334 29 
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274 254 
104 74 

106*2 614 

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344 29* ( 
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314 203« 

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634 547, 
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237, 144 
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684 484 
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357, 221, 

524 «4 
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374 244 
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234 «4 
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237, 0 
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174 64 
154 74 
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101% 72 
20*4 254 
334 284 
414 *4 
274 174 
364 17 
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304 « 
284 164 

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474 224 
29*2 13 
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214 114 
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384 16 
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714 464 
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204 w% 

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AMCA 
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AcmeC .40 


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12 «9 M% M% 1*4 -4 S* 114 Bonrme22 1.7 7 181 *34 

„ 2 64 84 + 4 I84 *4 BC8t»M258 9i9 22 1ft 

« 2961 S 44 44 -4 aT 1®, BcdEd1J2 92 6 MS «% 

9 3306 344 32 324 ~14 103 8*4 BosE p«48 60 *500 80 

97 10. 4 25% 25% 25% +% 17 13% Boat prl.48 9.7 2 « 

T 189 7 64 7 +4 444 22 Bowur .80 30 14 10*4 2*4 

2a 44 332 4», 4S4 464 +4 42 234 BiWSt 1 30 SO IS 99 04 

17 96 134 13 134 +4 558, 384 BrWM 81.40 3.6 16 £% 

2.1 18 3948 48 4ft 47% + ft 37% 22% BritAIr .78 M 272 2ft 

28 197, 167, Ws +4 324 204 SGas2pp75a 22 7 150 234 


45% 464 +4 
13 134+4 
484 474 +ft 
16*8 W% +4 


AcmeC M 40 W 227 104 10 104 +4 34 

ACftiaE32b 40 29 3 74 74 74 +4 1 3, 

Ad&ExlSOs 16. HO in, 174 in, +4 21 


224 BrltAir .78 30 272 

204 8Gaa2ppJ5e 62 7 150 234 


AdmMa 04 20 8 61 04 94 84 + 4 tt 


Advfiys 

AMD 

AMD pi 3 80 
AMt 

Adob pi 104 11. 
Adofa pi 240 12. 
MVSSt .128 10 

ArtnU 2.78 60 

ADR} S .32 7 

AhmanflB 5.7 
Alteon 

AlrPrd 1 20 

AJrbFtt OO 5.1 

Alrgaan 


17 1062 28 254 254 554 274. __ 

2936 104 W% 104 +4 114 *4 Brock R 17 76 £4 

228 31 304 304 +4 60 22 Brefcwa 06 1917 M W 

911 5 44 47, -4 324 1*4 BHP n .43# 20 *» !£ 

39 17 «4 164 +4 28% 184 BWyUCI08 74 9 225 2&i 

12 W7, »4 W, +*, a*4 «4 BwnSh 40 23 6 17*1 


24 BrMjnd • *=4 

384 BrflR 278* 52 W 933 ®% 
64 BrilP wt »• 

154 BrlPI PP _ 14?*“% 


55% 274 BrtfMMOt 40» 157 


6 174 

168 *»4 


10 6 84 84 74 84 +4 *4*, 264 BrwaCffW «Q 13 188 3°4 

60 7 1797B0*, 8ft 50% +% 384 174 BwnF»40 «23 HSS 1 

7 7 714 48 464 484 +1 30% »% Bmwka OO 109 20*8 1ft 


5.7 8 1991 154 T6 1 , 154 +4 444 *1 BrtfcWI OO 2A3P 301 3*4 

518 3*, 2 3*, +1 264 174 Bu6k«^20 11.8 206 »% 

2012 1618 35*, 344 3*4 +1 41% 10*, Bundy 02m 30 11 *3 27*, 

5.17 634 12 114 114 234 ’74 BultkrtC.16 «• 8 ]*% 

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